Simulation studies of the effects of Safety Stock and related policies upon Bullwhip oscillation in supply chains

In a recent earlier article, the dynamics of a supply chain were addressed by use of system dynamics models (Janamanchi, B. and Burns, J.R. 2007b). The focus was on the Bullwhip effect, and the possible overshoot and oscillation that can arise in Finished Goods (FG) inventories from it. In this article, studies involving the level of Safety Stock itself, along with lengthening replenishment strategies are investigated. The effects of lengthening the times to replenish Work-In-Process and FG are investigated. The impacts upon the Bullwhip effect as well as total costs and cycle time are studied. A practical strategy for implementation is also discussed.