Analysis of Bullwhip Effect in Supply Chain and Demonstrating it via System Dynamic Simulation

With the development of economy and information technology, the competition between enterprises has already entered the period of competition between supply chains . Risk management of a supply chain (SC) has a great influence on the stability of dynamic cooperation among SC partners and hence very important for the performance of the SC operations as a whole. One of important risk and disturbing sources of SC is order fluctuations along when move up in supply chain. Although cyclic demand fluctuation in market driven economies is a widely researched issue and well understood, upstream demand amplification in an industrial supply chain is less tacit. In this research we use the system engineering concept, the system dynamics approach for investigating the bullwhip effect in supply chain.

Keywords:

Bullwip effect , Supply chain , System dynamic , Simulation