The value of inventory and the direction of the supply chain bullwhip effect

Sima M. Fortsch and Elena A. Khapalova

International Journal of Business and Systems Research, 2018, vol. 12, issue 4, 391-410

Abstract: The bullwhip effect (BWE) is the amplification of demand variability in a supply chain and can be quite costly for industry and society. In this empirical investigation of the BWE a three-stage supply chain is examined using monthly industry-level data. Time series regression equations are used to detect the BWE and its direction. Empirical evidence is found suggesting the BWE of a supply chain member is influenced by the BWE of the other members, as well as the values of inventory and inventory to sales ratios of own member and other members of supply chain. In addition, there is evidence that the direction of the BWE is not influenced by the members' horizontal positions in the network. It is shown that the wholesale BWE exhibits heteroscedastic and non-stationary behaviour; thus, making it difficult to predict over a long-horizon time period, unlike the BEW of the manufacturing and retail industries.

Keywords: inventory; bullwhip effect; reverse bullwhip effect; econometrics; regression; time series; inventory to sales ratio; direction of the bullwhip effect; empirical study. (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=95070 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbsre:v:12:y:2018:i:4:p:391-410

Access Statistics for this article

More articles in International Journal of Business and Systems Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().