Impact of Information Sharing on Bullwhip Effect in a Non-Serial Supply Chain with Stochastic Lead Time

Abstract

In this paper, we study the impact of information sharing on the bullwhip effect in a supply chain (SC) with one distributor and multiple retailers. We consider three levels of information sharing: No information sharing, demand information sharing, and vendor-managed inventory system. We model retailers’ demands by independent first-order autoregressive processes. We also assume base-stock policies for retailers’ and distributors’ stock replenishment. Following Wu et al. (2008), we derive expressions for the bullwhip effect for each level of information sharing. We considered stochastic lead times for all retailers and the distributor. Our findings suggest that the bullwhip effect decreases with increased information sharing. This observation is in sync with that of Wu et al. (2008), who considered deterministic lead time.