We investigate a serial supply chain, using a new simulation engine (SISCO; Chatfield, 2001). We begin with a serial supply chain with five nodes - customer, retailer, wholesaler, distributor, factory - and then verify the simulation results mathematically. We find that if the order system parameters remain unchanged there would be no Bullwhip Effect. But with human intervention in the updating of system parameters, there would be an amplification of variance as we go upstream. We also find that the use of the normal approximation to lead-time demand in setting safety stocks could be egregiously wrong, if negative orders (e.g., returns) are not allowed.
展开▼
