A Discrete Event Simulation Analysis of the Bullwhip effect in a Multi-Product and Multi- Echelon Supply Chain of Fast Moving Consumer Goods | [Pakistan Journal of Statistics and Operation Research • 2020]

Author(s):

1. Ramsha Ali: School of Quantitative Sciences, UUM College of Arts and Sciences, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, Malaysia

2. Ruzelan Bin Khalid: Institute of Strategic Industrial Decision Modelling (ISIDM), School of Quantitative Sciences, UUM College of Arts and Sciences, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, Malaysia

3. Shahzad Qaiser: Department of Computer Science, Capital University of Science and Technology (CUST), Islamabad, Pakistan

Abstract:

Timely delivery is the major issue in Fast Moving Consumer Good (FMCG) since it depends on the lead time which is stochastic and long due to several reasons; e.g., delay in processing orders and transportation. Stochastic lead time can cause inventory inaccuracy where echelons have to keep high product stocks. Such performance inefficiency reflects the existence of the bullwhip effect (BWE), which is a common challenge in supply chain networks. Thus, this paper studies the impact of stochastic lead time on the BWE in a multi-product and multiechelon supply chain of FMCG industries under two information-sharing strategies; i.e., decentralized and centralized. The impact was measured using a discrete event simulation approach, where a simulation model of a four-tier supply chain whose echelons adopt the same lead time distribution and continuous review inventory policy was developed and simulated. Different lead time cases under the information-sharing strategies were experimented and the BWE was measured using the standard deviation of demand ratios between echelons. The results show that the BWE cannot be eliminated but can be reduced under centralized information sharing. All the research analyses help the practitioners in FMCG industries get insight into the impact of sharing demand information on the performance of a supply chain when lead time is stochastic.

Page(s): 561-576

DOI: 10.18187/pjsor.v16i3.3088

Published: Journal: Pakistan Journal of Statistics and Operation Research, Volume: 16, Issue: 3, Year: 2020

Keywords:

Information Sharing , supply chain management , Discrete event simulation , Bullwhip effect , Fastmoving consumer goods , Lead time

References:

References are not available for this document.

Citations

Citations are not available for this document.

Citations

Downloads

Views