Analysis of the Bullwhip Effect in Supply-demand-driven Chain Considering Replenishment Policies

In a supply-demand-driven chain,the minimum mean-squared error forecasting technique is used to estimate the lead time demand and analyze the bullwhip effect under three replenishment policies—the inventory position smoothing replenishment policy,the order quantity smoothing replenishment policy and the general linear replenishment policy.The research shows that:(1)the order quantity smoothing replenishment policy can be the best choice in the reduction of bullwhip effect;(2)in terms of the inventory position smoothing replenishment policy and the general linear replenishment policy,the latter will be a better choice to weaken the bullwhip effect obviously when inventory smoothing coefficient is small,the retailer lead time is small or the product price adjustment coefficient is large.The inventory position smoothing replenishment policy is more effective in alleviating bullwhip effect than the general linear replenishment policy when the retailer lead time is large.At the same level of product demand and supply fluctuation,the general linear replenishment policy is much advantageous to minimum bullwhip effect.