Study On Alleviating Countermeasure Against Bullwhip Effect In Supply Chain

The paper studies,a bullwhip effect that occurred because of information lack fidelity caused by uncertain factors in the supply-chain and how to alleviate such the phenomenon. firstly,the author summarizes the negative effects of bullwhip effect, reason of existence and how to control it. Secondly,studying on simple two-echelon supply chain, making up of one supplier-and-one retailer, and another type supply chain, making up of one supplier-and-two retailer,the author gives out quantitative analysis on bullwhip effect. Thirdly beyond the previous studies,we consider multiple retailers with one supplier in the supply chain and examine ways in which the supplier can reduce the total demand variance by adjusting retailers' order sizes. The results reveal that the total demand variance can be reduced by using portfolio theory to adjust the order sizes based on the variance of order of the retailer. Therefore,the bullwhip effect can be partially reduced by our proposed method.