Policy for weakening the bullwhip effect from mental perspectives -A system dynamics based study

Abstract

The bullwhip effect, which is a typical dynamic problem in the supply chain system, was identified over half a century ago. Numerous studies have been undertaken to investigate the cause and the corresponding solutions of it. This thesis aims at investigating the impact of different ways to think about the decision making and the consequences this has for the performance of a supply chain. The first part, i.e. the literature review, summarizes previous studies of supply chain management and the bullwhip effect. It draws upon insight from the myriad of authors in the literature as well as personal reflections. Three beer game experiments are being presented: the traditional beer game; one where participants hold in-transit stock information; and one where participants hold supply line inventory information. When presenting the beer game model, the causal relationships governing the beer game is being discussed as well. The findings of the proposed simulation model are consistent with the results obtained from the experiments. Two groups of policies are discussed in detail, i.e. policies on the information availability, and policies on the utilization way of the information. Guidelines are provided on how the adverse effect of the bullwhip effect can be minimized, if not avoided.