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Information sharing as a remedy to demand amplification in supply chains
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MatloubHussain1, a,* and Mian M. Ajmal2, b
1Assistant Professor, College of Business Administration (COBA),
Abu Dhabi University, P.O Box 59911,
Abu Dhabi, UAE,
2Assistant Professor,College of Business Administration (COBA),
Abu Dhabi University, P.O Box 59911,
Abu Dhabi, UAE,
aMatloub.hussain@adu.ac.ae , bMian.Ajmal@adu.ac.ae
*Corresponding author: Matloub.hussain@adu.ac.ae
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Abstract
.Demand amplification, also known as bullwhip effect, is the amplification of demand variability as it progresses up a supply chain. Bullwhip effect has determinental effects on the performance of supply chains. Objective of this paper is to quantify the impact of information sharing on bullwhip effect in a model of inventory and order based multi-echelon supply chain. System dynamics simulation, with the help of iThink software package, has been applied. It has been found through simulation experiments that information sharing can be a very effective strategy to control bullwhip effect across supply chains. Increasing the percentage of information sharing results in bullwhip reduction. In a model of four tiers supply chains, information sharing can reduce bullwhip effect from 20:1 to 8:1. This shows that supply chains manager can effectively reduce cost, improve customer service level and increase efficiency of their supply chains by sharing information across whole supply chains.
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Keywords
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Supply chain; Bullwhip effect; Information sharing
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URL: http://dx.doi.org/10.7321/jscse.v3.n3.22
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