Metrics for bullwhip effect analysis

Abstract

A bullwhip measurement system based on a two-criterion assessment—‘internal process efficiency’ and ‘customer service level’—is developed in this paper. The framework is designed to assess both individual (single member) and systemic (whole supply chain) performances. Data collection and calculation methods, update and monitoring mechanisms, as well as related procedures for each metric used, are detailed. A comparative analysis with a recent work by Barlas and Gunduz is performed, showing that the adoption of the proposed performance measurement system can help academics and practitioners to better understand, study and avoid the bullwhip effect. Such analysis also provides evidence on the relevance of considering when analysing the bullwhip effect in supply chains, the ‘customer importance’ aspect that is often forgotten in the published literature.

Keywords:

• performance measure
• inventory management
• supply chain costs
• demand amplification
• system dynamics

Correction

In a previous version of this article the cited article by Barlas and Gunduz was wrongly dated to 2001. This reference has been corrected to “Barlas and Gunduz (2011)”.

Correction

In a previous version of this article the cited article by Barlas and Gunduz was wrongly dated to 2001. This reference has been corrected to “Barlas and Gunduz (2011)”.

Acknowledgements

We wish to thank the anonymous referees for insightful comments on earlier versions of the paper. We also would like to express our gratitude to Dr Elena Ciancimino for her contribution to the development of the proposed framework. This research was funded by a grant from the Portuguese Foundation for Science and Technology, grant SFRH/BPD/68576/2010.