Work

Supply chain network design with the presence of the bullwhip effect

Year: 2025

Type: article

Abstract: This paper presents a modeling framework that integrates facility location-allocation and inventory control decisions, accounting for the potential presence of the bullwhip effect. Since incorporating the bullwhip effect adds complexity to the optimization problem, we apply linearization and approximation techniques in our solution approach. Through numerical experiments, we assess how the bullwhip effect influences optimal network design, focusing on various design parameters. The results suggest that the bullwhip effect can significantly influence network design, with lead time playing a particularly critical role in differentiating designs for supply chains with and without the bullwhip effect. Additionally, through a simulation study, we explore how incorporating the bullwhip effect may affect the resilience of supply chain networks when facing supply disruptions.

Source: International Journal of Production Economics

DOI: 10.1016/j.ijpe.2025.109668

Authors: Agus Darmawan, Hartanto Wijaya Wong, Jan Fransoo

Institutions: Universitas Gadjah Mada, Aarhus University, Tilburg University

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,420