Assessing the Impact of Prices Fluctuation on Demand Distortion Within a Multi-echelon Supply Chain
AbstractPrice fluctuation is a practice commonly used by companies to stimulate demand and a main cause of the Bullwhip effect. Assuming a staggered step demand pattern that responds elastically to retailer’s price fluctuation, and by using a supply chain management dynamic model, we will analyse the impact of these fluctuations on the variability of the orders placed along a traditional multilevel supply chain. Subsequently, the results obtained will serve to propose a forecasting model enabling to calculate the potential variability of orders placed by each echelon on the basis of the price pattern used. Finally, under the hypothesis of an environment of collaboration between the different members of the chain, we propose a predictive model that makes it possible to quantify the distortion of the orders generated by each level. KEYWORDS: Bullwhip effect, systems dynamics, price fluctuation, supply chain management
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).