Performance analysis of supply chains under customer demand information sharing using role play game

Abstract: Supply chain is a network of organizations that work together and performs various business functions such as procurement of raw materials, converting the raw material into semi-finished or finished goods and distributing the same to their ultimate customers. Presence of bullwhip effect in a supply chain is costly and degrades the performance of the supply chain. Reduction in bullwhip effect can improve the efficiency or profitability of a supply chain. The objective of this paper is to know the impact of imperfect Advance Demand Information (ADI) sharing on bullwhip effect in a four-stage serial supply chain and to evaluate the supply chain performance by conducting an experiment similar to the beer distribution game. The performance measures used are variance of orders placed by each stage, fill rate, total inventory at each stage and total holding cost of the supply chain. Results show that imperfect ADI improves the performance of the supply chain. The performance of the supply chain is also evaluated under order up to level (R, S) policy with safety stock and it is found that the performance of supply chain is better when inventory policy used.

How to cite this paper

 Pamulety, T & Pillai, V. (2012). Performance analysis of supply chains under customer demand information sharing using role play game.International Journal of Industrial Engineering Computations , 3(3), 337-346.

Refrences

Agrawal, S., Sengupta, R.N. & Shankar, K. (2009). Impact of information sharing and lead time on bullwhip effect and on-hand inventory. European Journal of Operational Research, 192, 576-593.

Bottani, E., Montanari, R. & Volpi, A. (2010). The impact of RFID and EPC network on the bullwhip effect in the Italian FMCG supply chain. International Journal of Production Economics, 124, 426 – 432.

Croson, R. & Donohue, K., (2003). Impact of POS data sharing on supply chain management: an experiment. Production and Operations Management, 12(1), 1-12.

Croson, R. & Donohue, K. (2006). Behavioral causes of the bullwhip effect and the observed value of inventory information. Management Science, 52 (3), 323-336.

Dejonckheere, J., Disney, S.M., Lambrecht, M.R. & Towill, D.R. (2003). Measuring and avoiding the bullwhip effect: A control theoretic approach. European Journal of Operational Research, 147, 567-590.

Johnson, R.A., (2004). Probability and statistics for engineers . Prentice-Hall India.

Lee, H.L, Padmanabhan, V. & Whang, S. (1997). The bullwhip effect in supply chains. Sloan Management Review, 38 (3), 93-102.

Lee, H.L, Padmanabhan, V. & Whang, S. (2004). Information distortion in a supply chain: The bullwhip effect. Management Science, 50 (12), 1875-1885.

Metters, R., (1997). Quantifying the bullwhip effect in supply chains. Journal of Operations Management, 15, 89-100.

Montgomery, D.C. (2001). Introduction to statistical quality control. John Wiley & Sons.

Siegel, S. & Castellan, N.J., (1988). Nonparametric statistics for the behavioral sciences. McGraw Hill international editions.

Silver, E.A., Pyke, D.F. & Peterson, R. (1998). Inventory management and production planning and scheduling. John Wiley & Sons, New York.

Simchi-Levi, D., Kaminsky, P., Simchi-Levi, E. & Shankar, R., (2008). Designing and Managing the Supply Chain - concepts, strategies and case studies. Tata McGraw-Hill.

Steckel, J.H., Gupta, S. & Banerji, A. (2004). Supply chain decision making: will shorter cycle times and shared point-of-sale information necessarily help?. Management Science, 50 (4), 458-464.

Sterman, J.D. (1989). Modeling managerial behaviour: Misperceptions of feedback in a dynamic decision making experiment. Management Science, 35 (3), 321-339.

Sterman, J.D. (2009). "The Beer Game" available online at http://web.mit.edu/jsterman/www/SDG/beergame.html. (Accessed on May, 2009)

Sucky, E., (2009). The bullwhip effect in supply chains – An overestimated problem?. International Journal of Production Economics, 118, 311 – 322.

Tan, T., Gullu, R. & Erkip, N. (2007). Modelling imperfect advance demand information and analysis of optimal inventory policies. European Journal of Operational Research, 177, 897-923.

Wang, X., Liu, Z., Zheng, C. & Quan, C. (2008). The impact of Lead time on bullwhip effect in supply chain. IEEE transactions, 93-97.

Wu, D.Y. & Katok, E. (2006). Learning, communication and bullwhip effect. Journal of Operations Management, 24, 839-850.