The impact of inventory sharing on the bullwhip effect in decentralized inventory systems
First online: 19.12.2012
Cite this article as: Le, D.V., Huynh, L.T., Claudiu, K.V. et al. Logist. Res. (2013) 6: 89. doi:10.1007/s12159-012-0096-7
The paper derives the impact of inventory sharing policy on the bullwhip effect in two-stage supply chains with two independent suppliers and two integrated retailers. There exists an inventory sharing policy between two retailers. Under inventory sharing policy, when demand in one retailer exceeds its inventory, this retailer can ask for a product sharing volume from the other in order to satisfy customer demand. With certain assumptions, the bullwhip effect is quantified in both cases, with inventory sharing policy and without inventory sharing policy. We found that inventory sharing has significant impact on the bullwhip effect in the supply system. However, inventory sharing policy does not synchronously reduce or increase the bullwhip effect in both suppliers in the same period. A numerical example is given to illustrate the study model.
Inventory sharing policy Bullwhip effect Supply chain management Decentralized inventory Order lead time References