Modeling and analysis of the causes of bullwhip effect in centralized and decentralized supply chain using response surface method

The “bullwhip” effect is a major cause of supply chain deficiencies. This phenomenon refers to grow the amplification of demand or inventory variability as it moves up the supply chain. Supply chain managers experience this variance amplification in both inventory levels and orders. Other side, dampening variance in orders may have a negative impact on customer service due to the increase in the inventory variance. This paper with simulating a three stage supply chains consisting of a single retailer, single wholesaler and single manufacturer under both centralized and decentralized chains. In this paper, it is intended to analysis the causes of bullwhip effect from two dimensions of order and inventory variance using the response surface methodology. The results show that in both supply chains, rationing factor is considered as the least important cause of bullwhip effect. While the wholesaler’s order batching and the chain’s order batching are considered as the main causes for the bullwhip effect in the decentralized and centralized chains, respectively.