Returns and the bullwhip effect

Dean C. Chatfield, Alan M. Pritchard

Research output: Contribution to journalArticle

63 Scopus citations

Abstract

An almost universal assumption in the bullwhip effect modeling literature is that excess goods may be returned without restriction. We seek to determine if returns impact the level of bullwhip effect observed in a multi-stage supply chain. We build a hybrid agent/ discrete-event simulation model of a supply chain and execute it under various conditions of demand variance, lead-time variance, information sharing, and return allowance. We find that permitting returns significantly increases the bullwhip effect. As a result, applying models that assume returns are permitted will systematically overestimate the bullwhip effect for supply chains that restrict returns.

Original languageEnglish
Pages (from-to)159-175
Number of pages17
JournalTransportation Research Part E: Logistics and Transportation Review
Volume49
Issue number1
DOIs
StatePublished - 2013

Keywords

  • Bullwhip effect
  • Inventory
  • Returns
  • Simulation

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