Contingency Between Elasticityof Demand and Bullwhip Effectin Logistics Chains

• Francisco Campuzano-Bolarín ^[1] ; Marija Bogataj ; Lorenzo Ros-McDonnell ^[1]
  1. [1] Universidad Politécnica de Cartagena
• Localización: Industrial Engineering: Innovative Networks: 5th International Conference on Industrial Engineering and Industrial Management "CIO 2011", Cartagena, Spain, September 2011, Proceedings / Suresh P. Sethi (dir. congr.), Marija Bogataj (dir. congr.), Lorenzo Ros McDonnell (dir. congr.), 2012, ISBN 978-1-4471-2321-7, págs. 201-208
• Idioma: inglés
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• Resumen

  • This paper discusses how the elasticity of final demand influences the bullwhip amplification when sudden economic changes appear along the entire multi-level supply chain. Increased variability of prices does not affect added value substantially in a supply chain where the price elasticity of demand is small(around 0.1) but with an elasticity of 10 or more, high price variances may result in significant losses. A traditional model of dynamic supply chain structure is used for our study, based on the seminal work of Forrester. A simulation platform for supplychain management with stochastic demand has been developed to study such a phenomenon. Vensim simulation software was used for developing the appropriate supply chain dynamic models. The aim of our study is to gain a deeper insight into theprocesses in a logistic chain, at different elasticities of price demand.