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inventory control

The Influence of Decision Patterns on the Bullwhip Effect

The Influence of Decision Patterns on the Bullwhip Effect

Counterintuitive decision making as a behavioral cause
Bernd Scholz-Reiter ORCID Icon, Salima Delhoum
The bullwhip effect leads to instabilities in supply chains. Research on this phenomenon stresses the normative approach. This means that the causes of the bullwhip effect are identified within the structure and processes of the supply chain. However, the bullwhip effect persists even when the operational causes are under control, or when demand information is stationary and known to all parties. Most of all, the influence of behavioural decision making on the bullwhip effect has been underestimated. This is why the paper strives to shed light on this aspect by resorting to a simulation game, the supply net game, for learning inventory control in production networks. The experimental results, involving 130 participants, show that the decision pattern of counterintuitive decision making produces and reinforces what it is thought to lessen namely the bullwhip effect. This happens whenever the participants restrain from ordering while backlogs are building up or continue to order while ...
Industrie Management | Volume 24 | 2008 | Edition 4 | Pages 53-56
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