Serial vs. divergent supply chain networks: a comparative analysis of the bullwhip effect

Abstract

The amplification of demand variation in a supply chain network (SCN) is a well-known phenomenon called the bullwhip effect, which creates inefficiencies due to high variation in the order quantities placed between companies, leading to a flow of a larger number of units than the actual need, increasing stock and generating stock-outs. Since this phenomenon has been recognized as one of the main obstacles for improving SCN performance, recently it has received a lot of attention by SCN managers and researchers. One of the most common simplifying assumptions in the literature is to assume that the SCN adopts a serial structure. The present work addresses a comparative analysis of the bullwhip effect between a serial SCN and a more complex divergent SCN. To do so, we adopt the framework proposed by Towill et al. (2007), and analyze the response of both SCNs under two different input demands: a stationary demand and an impulse demand. The results reveal that there are not significant differences in terms of bullwhip effect between both SCNs for a stationary demand. Nevertheless, we show how for a violent disturbance in customer demand there is a great different between the two SCNs.