inventory inaccuracies in the wholesale supply chain abstract the inventory level shown in the information system contrary to popular belief and assumptions in most academic papers and in spite of the considerable amounts invested in information technology is often inaccurate the inventory inaccuracy occurs when the inventory shown in the information system is not in agreement with the actually available inventory in this paper we first describe the major factors generating inventory inaccuracy then we provide situations permitting to manage an inventory system subject to errors we provide a general framework permitting to model the inventory inaccuracy issue in particular we link the inaccuracy issue with the well known random yield problem the shown link permits us to derive the optimal ordering policy of an inventory framework where demand satisfaction is done based on the inventory records which are subject to inaccuracies we also propose an analysis permitting to show the added value of an advanced identification system such as the rfid technology

human fallibility and economic organization doctrines concerning what is a good way to organize a society have influenced human societies more deeply than any other set of doctrines specifically beliefs that one way of organizing production and exchange is better than others have inspired a number of socioeconomic experiments leading to modern capitalist and socialist societies with far reaching implications yet surprisingly the central doctrines though a source of continuing ideological debate have been the subject of only limited scientific enquiry the major proposition the so called langelerner taylor theorem asserting the equivalence between competitive capitalist economies and decentralized socialist economies which make use of the price system made a point in stressing that the issue of the ownership of the means of production might not be central in the comparison of economic systems the theorem however was based on models both of capitalism and of market socialism in which the most important differences between the two systems were suppressed this paper describes a research program attempting to delineate some of the critical differences among alternative forms of economic organization we contend that central to an understanding of these differences is an understanding of differences in the organization of decision making of who gathers what information how it gets communicated and to whom and how decisions get made both concerning what actions to take and who should fill decision making positions this view should be contrasted with the traditional economic paradigm in which decision making plays no role the manager for instance simply looks up in a book of blueprints what the appropriate technique of production is for the given set of factor prices in the conventional paradigm moreover mistakes are never made either in gathering or transmitting information or in making decisions and indeed there are no costs associated with these activities by contrast the view we take here is that to err is human and that different organizational systems differ not only in what kinds of errors individuals make in them but also in how the systems aggregate errors as a result organizations differ systematically in the kinds of errors they make and thus in their overall economic performance organizations also differ in the costs associated with information collection with information communication and processing and with decision making indeed as we discuss below perfect decision making can be achieved by arranging enough decision makers in an appropriate manner no matter how fallible the decision makers are provided their decisions are not purely random or worse what prevents perfect decision making is the cost we refer to the specification of the structure of information gathering communication and decision making as an organization s architecture the objective of our research program has been to construct stylized models of an economic organization within which the consequences of alternative organizational architectures can be examined using these models not only can we compare the performance of particular organizational forms but we can also ask given a particular set of objectives and circumstances what is the optimal structure within tdiscussants david kreps stanford university paul milgrom yale university

reducing the bullwhip effect looking through the appropriate lens demand amplification now frequently referred to as bullwhip is potentially a very costly phenomenon it can lead to stock outs large and expensive capacity utilisation swings lower quality products and considerable production transport on costs as deliveries are ramped up and down at the whim of the supply chain however the detection of bullwhip depends on which lens is used this in turn depends on the background and requirements of various players within the value stream to gain insight into this scenario we exploit a relatively simple replenishment model because new and novel analytic solutions have been derived for all important performance metrics comparison of the competing bullwhip measures is thereby greatly streamlined in the complex real world the likelihood is that supply chains will generate even greater inconsistency between alternative variance shock and filter lens viewpoints

behavioral causes of the bullwhip effect and the observed value of inventory information the tendency of orders to increase in variability as one moves up a supply chain is commonly known as the bullwhip effect we study this phenomenon from a behavioral perspective in the context of a simple serial supply chain subject to information lags and stochastic demand we conduct two experiments on two different sets of participants in the first we find the bullwhip effect still exists when normal operational causes e g batching price fluctuations demand estimation etc are removed the persistence of the bullwhip effect is explained to some extent by evidence that decision makers consistently underweight the supply line when making order decisions in the second experiment we find that the bullwhip and the underlying tendency of underweighting remains when information on inventory levels is shared however we observe that inventory information helps somewhat to alleviate the bullwhip effect by helping upstream chain members better anticipate and prepare for fluctuations in inventory needs downstream these experimental results support the theoretically suggested notion that upstream chain members stand to gain the most from information sharing initiatives

multi resource investment strategies operational hedging under demand uncertainty abstract consider a firm that markets multiple products each manufactured using several resources representing various types of capital and labor and a linear production technology the firm faces uncertain product demand and has the option to dynamically readjust its resource investment levels thereby changing the capacities of its linear manufacturing process the cost to adjust a resource level either up or down is assumed to be linear the model developed here explicitly incorporates both capacity investment decisions and production decisions and is general enough to include reversible and irreversible investment the product demand vectors for successive periods are assumed to be independent and identically distributed the optimal investment strategy is determined with a multi dimensional newsvendor model using demand distributions a technology matrix prices product contribution margins and marginal investment costs our analysis highlights an important conceptual distinction between deterministic and stochastic environments the optimal investment strategy in our stochastic model typically involves some degree of capacity imbalance which can never be optimal when demand is known

impact of information sharing and lead time on bullwhip effect and on hand inventory abstract this work analyzes a two echelon warehouse retailer serial supply chain to study the impact of information sharing is and lead time on bullwhip effect and on hand inventory the customer demand at the retailer is assumed to be an autoregressive ar 1 process both the echelons use a minimum mean squared error mmse model for forecasting lead time demand ltd and follow an adaptive base stock inventory policy to determine their respective order quantities for the cases of without is and inter as well as intra echelon is expressions for the bullwhip effect and on hand inventory for the warehouse are obtained considering deterministic lead time the results are compared with the previous research work and an easy analysis of the various bullwhip effect expressions under different scenarios is done to understand the impact of is on the bullwhip effect phenomenon it is shown that some part of bullwhip effect will always remain even after sharing both inter as well as intra echelon information further with the help of a numerical example it is shown that the lead time reduction is more beneficial in comparison to the sharing of information in terms of reduction in the bullwhip effect phenomenon

analysis of compound bullwhip effect causes abstract this research investigates compound causes of the bullwhip effect bwe by considering an inventory system with multiple price sensitive demand streams joint price and demand dynamics are captured by a vector time series process that incorporates the stochastic co movements in price and demand we study two bwe measures one for each demand stream individually and one for the aggregated demand we show that demand parameters including demand autocorrelation cross correlation and price sensitivity serve as root causes of the bwe we prove that the impact of these parameters on the bwe can be additively decomposed conditions are established under which a pair of simultaneous compound causes may attenuate or dampen the bwe when demand streams are aggregated we derive a pooling factor that quantifies the impact of demand aggregation on order stability when positive the pooling factor corresponds to a synergy effect that captures the gain in the stability of the pooled orders conditions for the existence of the synergy effect are obtained for several special cases involving a zero leadtime we also discuss how our analytical findings can be managerially applied to bullwhip mitigation strategies

the impact of forecasting methods on the bullwhip effect abstract this paper considers the impact of forecasting methods on the bullwhip effect for a simple replenishment system in which a first order autoregressive process describes the customer demand and an order up to inventory policy characterizes the replenishment decision a bullwhip effect measure is derived for the optimal forecasting procedure that minimizes the mean squared forecasting error for the specified demand process similar measures are obtained for the moving average and exponential smoothing methods the findings indicate that different forecasting methods lead to bullwhip effect measures with distinct properties in relation to lead time and underlying parameters of the demand process moreover a simple rule is established to help managers select a forecasting method that yields the lowest inventory cost

evaluation of cycle count policies for supply chains with inventory inaccuracy and implications on rfid investments inventory record inaccuracy leads to ineffective replenishment decisions and deteriorates supply chain performance conducting cycle counts i e periodic inventory auditing is a common approach to correcting inventory records it is not clear however how inaccuracy at different locations affects supply chain performance and how an effective cycle count program for a multi stage supply chain should be designed this paper aims to answer these questions by considering a serial supply chain that has inventory record inaccuracy and operates under local base stock policies a random error representing a stock loss such as shrinkage or spoilage reduces the physical inventory at each location in each period the errors are cumulative and are not observed until a location performs a cycle count we provide a simple recursion to evaluate the system cost and propose a heuristic to obtain effective base stock levels for a two stage system with identical error distributions and counting costs we prove that it is more effective to conduct more frequent cycle counts at the downstream stage in a numerical study for more general systems we find that location proximity to the customer error rates and counting costs are primary factors that determine which stages should get a higher priority when allocating cycle counts however it is in general not effective to allocate all cycle counts to the priority stages only one should balance cycle counts between priority stages and non priority stages by considering secondary factors such as lead times holding costs and the supply chain length in particular more cycle counts should be allocated to a stage when the ratio of its lead time to the total system lead time is small and the ratio of its holding cost to the total system holding cost is large in addition more cycle counts should be allocated to downstream stages when the number of stages in the supply chain is large the analysis and insights generated from our study can be used to design guidelines or scorecard systems that help managers design better cycle count policies finally we discuss implications of our study on rfid investments in a supply chain

the effect of inventory record inaccuracy in information exchange supply chains abstract the goal of this paper is to quantify the impact of inventory record inaccuracy on the dynamics of collaborative supply chains both in terms of operational performance i e order and inventory stability and customer service level to do so we model an information exchange supply chain under shrinkage errors in the inventory item recording activity of their nodes present the mathematical formulation of such supply chain model and conduct a numerical simulation assuming different levels of errors results clearly show that inventory record inaccuracy strongly compromises supply chain stability particularly when moving upwards in the supply chain important managerial insights can be extracted from this analysis such as the role of benefit sharing strategies in order to guarantee the advantage of investments in connectivity technologies

the architecture of economic systems hierarchies and polyarchies the authors present new ways of looking at economic organizations andsystems individuals judgments entail errors they sometimes reject good projects and accept bad projects the architecture of an economicsystem specifying how the decision making units are organized togetherwithin a system who gathers what information and who communicates what with whom affects its performance both because it influences thenature of errors that individuals make within the system and becauseit has a critical effect on the aggregation of individuals errors theperformance of two polar architectures decentralized polyarchical versus centralized hierarchical decision making authorities are analyzed and compared copyright 1986 by american economic association

do asset transfers build household resilience abstract we estimate the impact of an asset transfer program on household resilience we measure resilience as the probability that a household will sustain at least the threshold asset level required to support consumption above the poverty line using six rounds of data collected over 42 months in rural zambia we construct a measure of resilience based on households conditional welfare distributions to estimate program impacts we find that the program increased household resilience beneficiaries likelihood of being non poor in future periods increased by 44 the program both increased mean assets and decreased variance signaling an upward shift in households conditional asset distributions our method demonstrates the added value of the resilience estimation compared with a conventional impact assessment numerous households classified as non poor are unlikely to remain non poor over time and the relationship between wealth and resilience is driven by changes in both the conditional mean and the conditional variance

does 25 cents more per day make a difference the impact of livestock transfer and development in rural zambia abstract analyses of the impacts of asset transfer programs often find statistically significant effects on consumption expenditures that are large in percentage terms but small in absolute value this study explores the practical significance of such impacts using the case of a livestock transfer program among impoverished households in zambia as in other studies results show that the asset transfers increased household consumption expenditure and dietary diversity extending previous work this paper examines whether the increase in expenditures has been large enough to trigger changes in consumption patterns or in subjective assessment of poverty status changes in composition of expenditures composition of diet and subjective self assessment of poverty all suggest a growing sense of security and a practically significant change in welfare for treated households as transfers included three different types of animals dairy cows meat goats and draft cattle we are able to discern that the specific nature of the asset transferred influences food security impacts examination of change in the composition of consumption shows substantial effects on poverty and food security starting within six months of livestock transfers persistence of the impact through the next 18 months of our study period indicates that livestock transfers can have a sustained effect on poverty and food security

the effect of information sharing on supply chain stability and the bullwhip effect this paper analyzes the bullwhip effect in multi stage supply chains operated with linear and time invariant inventory management policies and shared supply chain information such information includes past order sequences and inventory records at all supplier stages the paper characterizes the stream of orders placed at any stage of the chain when the customer demand process is known and ergodic and gives an exact formula for the variance of the orders placed the paper also derives robust analytical conditions based only on inventory management policies to predict the presence of the bullwhip effect and bound its magnitude these results hold independently of the customer demand the general framework proposed in this paper allows for any inventory replenishment policies any ways of sharing and utilizing information and any customer demand processes it is also shown as a special case that sharing customer demand information across the chain significantly reduces but does not completely eliminate the bullwhip effect

supply chain forecasting when information is not shared the operations management literature is abundant in discussions on the benefits of information sharing in supply chains however there are many supply chains where information may not be shared due to constraints such as compatibility of information systems information quality trust and confidentiality furthermore a steady stream of papers has explored a phenomenon known as downstream demand inference ddi where the upstream member in a supply chain can infer the downstream demand without the need for a formal information sharing mechanism recent research has shown that under more realistic circumstances ddi is not possible with optimal forecasting methods or single exponential smoothing but is possible when supply chains use a simple moving average sma method in this paper we evaluate a simple ddi strategy based on sma for supply chains where information cannot be shared this strategy allows the upstream member in the supply chain to infer the consumer demand mathematically rather than it being shared we compare the ddi strategy with the no information sharing nis strategy and an optimal forecast information sharing fis strategy in the supply chain the comparison is made analytically and by experimentation on real sales data from a major european supermarket located in germany we show that using the ddi strategy improves on nis by reducing the mean square error mse of the forecasts and cutting inventory costs in the supply chain

impact of inventory inaccuracy on service level quality in q r continuous review lost sales inventory models this article focus on the behavior of a q r continuous review lost sales inventory model exposed to an inventory record inaccuracy iri an unusual phenomenon has been observed which runs counter to certain empirical practices in the smes based on the principle that safety stock is only necessary for certain intervals in the data inaccuracy rate both analytical results and simulation modeling are proposed to investigate the relationship between the quality of service safety stock and inventory inaccuracy under demand variations it is shown that the service level quality is a non monotone function of the inaccuracy rate i e the service level quality increases up to an iri level and subsequently decreases other inaccuracy distribution functions have produced the same phenomena with constant demand as well as with demand fluctuations finally another noteworthy result also shows the same phenomenon between the function involving a level of safety stock defined by simulation and the function between the service level quality and iri these different observed results are discussed in terms of both their contribution to the q r inventory management policies in smes and of the limitations to this study

do different types of assets have differential effects on child education evidence from tanzania to assess the conventional view that assets uniformly improve childhood development through wealth effects this paper tests whether different types of assets have different effects on child education the analysis indicates that household durables and housing quality have the expected positive effects but agricultural assets have adverse effects on highest grade completed and no effects on exam performance extending the standard agricultural household model by explicitly including child labor the study uses three waves of panel data from tanzania to estimate the effects of household assets on child education the analysis corrects for the endogeneity of assets and uses a hausman taylor instrumental variable panel data estimator to identify the effects of time invariant observables and more efficiently control for time invariant unobservables the negative effect of agricultural assets is more pronounced among rural children and children from farming households presumably due to the higher opportunity cost of their schooling

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

information distortion in a supply chain the bullwhip effect commentary consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

the bullwhip effect in supply chain networks this paper analyzes the propagation and amplification of order fluctuations i e the bullwhip effect in supply chain networks operated with linear and time invariant inventory management policies the supply chain network is allowed to include multiple customers e g markets any network structure with or without sharing information the paper characterizes the stream of orders placed by any supplier for any stationary customer demand processes and gives exact formulas for the variance of the orders placed and the amplification of order fluctuations the paper also derives robust analytical conditions based only on inventory management policies to predict the presence of the bullwhip effect for any network structure any inventory replenishment policies and arbitrary customer demand processes numerical examples show that the analytical results accurately quantify the bullwhip effect managerial insights are drawn from the analysis the methodology presented in this paper generalizes those in previous studies for serial supply chains

livestock s contribution to poverty alleviation how to measure it summary the difficulty of valuation of livestock outputs has strong political and economic implications for farmers because policies require metrics based on a case study in mali this paper gives different estimations of the contribution of livestock to reducing poverty using different methods from the most common measure based approaches that is a financial approach to an asset based approach the results show that the asset based approach reflects the roles of livestock in terms of security money cash and vulnerability but only a dynamic approach to indicators can account for the complex role of livestock in reducing poverty

research on bullwhip effect in energy efficient air conditioning supply chain abstract this paper investigates the energy efficient air conditioning supply chain which is composed of one supplier midea and two retailers i e suning and gome with a view of market share we measure the impact of retail prices variability in the two echelon supply chain on the bullwhip effect suning and gome are assumed to possess the autonomy of choosing prices and separately acquire various market shares according to which the relationship between the two prices is simply quantified the order up to inventory policy and the moving average forecasting method are respectively employed by the two retailers furthermore we cast light on how factors like price market share lead time and autoregressive coefficient affect bullwhip effect the results indicate that it s inadvisable to conduct large fluctuation on price besides demand dates that are more historical may actually reduce the bullwhip effect we also find that the bullwhip effect will be bigger when the competition becomes fiercer and there s a necessity for retailers to take measures to reduce the influence of competitors prices

an empirical investigation on causes and effects of the bullwhip effect evidence from the personal care sector abstract this paper analyses the empirical demand data for fast moving consumer goods to measure the bullwhip effect the data consist of the sell in from a large manufacturer to the retailers and the sell out from a retailer to the consumers our findings show that the bullwhip effect can be substantial indeed in more than 50 of the cases the demand upstream sell in is twice as variable as the demand downstream sell out however in other cases it can be negligible and in one case the demand upstream is slightly less variable than the demand downstream so while the bullwhip effect can be very large it need not be so finally we attempted to delve into the dynamics that generate a significant bullwhip effect and discovered that among the various causes that create the bullwhip effect discussed by lee et al 1997a price fluctuations and forward buys driven by sales targets play a decisive role we show that the flatter the final consumer demand sell out the more room there is for the retailers to forward buy in order to take advantage of the deals offered by the manufacturer s sales force toward the end of the sales period on the contrary the more variable the final consumer demand the less willing the retailer is to make a risky inventory investment and thus the more the retailer s orders closely follow consumer demand this result at the product family level is very consistent with the results that cachon et al 2007 obtained at the company industry level

milk in the data food security impacts from a livestock field experiment in zambia summary smallholder livestock ownership has potential to enhance food security by raising incomes of the poor and by increasing the availability of nutrient dense foods this paper exploits the staggered rollout of livestock distribution by heifer international in zambia to identify the effects of livestock using statistically similar treatment and control groups in a balanced panel of households results indicate that livestock ownership improves dietary diversity through both direct consumption of animal products produced on farm and through increased consumption expenditures further results indicate that expanded livestock ownership alters the local food economy to influence food consumption by households lacking farm animals

reverse bullwhip effect in pricing price variability is one of the major causes of the bullwhip effect this paper analyzes the impact of procurement price variability in the upstream of a supply chain on the downstream retail prices procurement prices may fluctuate over time for example when the supply chain players deploy auction type procurement mechanisms or if the prices are dictated in market exchanges a game theory framework is used here to model a serial supply chain sequential price game scenarios are investigated to show that there is an increase in retail price variability and an amplified reverse bullwhip effect on prices rbp under certain demand conditions

how much can asset transfers help the poorest evaluating the results of brac s ultra poor programme 2002 2008 abstract the impacts of an innovative programme in rural bangladesh which has assisted extremely poor households literally the poorest of the poor were assessed over a six year period 2002 2008 the provision of a substantial dose of assets has helped produce very positive results by and large vulnerability to downturns on account of negative events such as illnesses and house damage has resulted in asset losses for several assisted households additional measures that reduce vulnerability and risk will help complete the good work commenced by the asset transfer plan

the impact of information enrichment on the bullwhip effect in supply chains a control engineering perspective this paper examines the beneficial impact of information sharing in multi echelon supply chains we compare a traditional supply chain in which only the first stage in the chain observes end consumer demand and upstream stages have to base their forecasts on incoming orders with an information enriched supply chain where customer demand data e g epos data is shared throughout the chain two types of replenishment rules are analysed order up to out policies and smoothing policies policies used to reduce or dampen variability in the demand for the class of out policies we will show that information sharing helps to reduce the bullwhipeffect variance amplification of ordering quantities in supply chains significantly especially at higher levels in the chain however the bullwhip problem is not completely eliminated and it still increases as one moves up the chain for the smoothing policies we show that information sharing is necessary to reduce order variance at higher levels of the chain the methodology is based on control systems engineering and allows us to gain valuable insights into the dynamic behaviour of supply chain replenishment rules we also introduce acontrolengineering based measure to quantify the variance amplification bullwhip or variance reduction

origin of predictable behavior further modeling and applications economic theory is founded on the assumption that agents act as if they are able to maximize according to well behaved preferences regardless of how complex their decision problems might be consequently the theory has never investigated the consequences of a genuine gap between an agent s decision making competence and the difficulty of a decision problem called a c d gap in a recent paper 1983 hereafter called the origin paper i outlined a general theory for investigating the latter possibility a major theme was that recurrent pattern in behavior arises because of decision making uncertainty due to a c d gap so that uncertainty becomes the basic source of predictable behavior here i discuss certain theory topics that were only sketched in the origin paper and briefly suggest a few related applications to pursue these objectives i begin with a short restatement of the reliability condition introduced in the origin paper

comments on information distortion in a supply chain the bullwhip effect in this commentary we trace back how we pursued research on the bullwhip effect which resulted in the article published in management science we reflect on the evolution of this concept the impact that our work has had on industry the way our work has been used in the teaching of supply chain management and the key directions of research that have taken place since then

the bullwhip effect in capacitated supply chains with consideration for product life cycle aspects abstract this paper presents an analysis of the bullwhip effect and net stock amplification in a three echelon supply chain considering step changes in the production rates during a product s life cycle demand the analysis is focused around highly complex and engineered products e g automobiles that have relatively long production life cycles and require significant capital investment in manufacturing using a simulation approach we analyze three stages of the product life cycle including low volumes during product introduction peak demand and eventual decline toward the end of the life cycle parts of the simulation model have been adopted by a major north american automotive oem as part of a scenario analysis tool for strategic supply network design and analysis the simulation results show that performance of a system as a whole deteriorates when there is a step change in the life cycle demand while restriction in production capacity does not significantly impact the bullwhip effect it increases the net stock amplification significantly for the supply chain setting under consideration furthermore a number of important managerial insights are presented based on sensitivity analysis of interaction effect of capacity constraints with other supply chain parameters

single versus multiple supplier sourcing strategies successful supply chain management necessitates an effective sourcing strategy to combat uncertainties in both supply and demand in particular supply disruption results in excessive downtime of production resources upstream and downstream supply chain repercussions and eventually a loss in the market value of the firm in this paper we analyze single period single product sourcing decisions under demand uncertainty our approach integrates product prices supplier costs supplier capacities historical supplier reliabilities and firm specific inventory costs a unique feature of our approach is the integration of a firm specific supplier diversification function we also extend our analysis to examine the impact of minimum supplier order quantities our results indicate that single sourcing is a dominant strategy only when supplier capacities are large relative to the product demand and when the firm does not obtain diversification benefits in other cases we find that multiple sourcing is an optimal sourcing strategy we also characterize a non intuitive trade off between supplier minimum order quantities costs and supplier reliabilities finally we examine the robustness of our results through an extensive numerical analysis of the key parameters of our model

bullwhip effect and supply chain costs with low and high quality information on inventory shrinkage abstract inventory inaccuracy is the mismatch between the recorded inventory and the physical inventory which is severe and widespread in industry a few studies have investigated the bullwhip effect with the existence of inventory inaccuracy the development of information technologies has provided companies with access to accurate inventory information in real time this will surely affect the bullwhip effect and supply chain costs the aim of this paper is to build an analytical model to systematically investigate these effects we consider a retailer manufacturer supply chain in which the retailer faces inventory shrinkage which is the main cause of inventory inaccuracy both the situations with accurate real time inventory information i e high quality information and the situation with statistical inventory information i e low quality information are studied we examine the relationships between the bullwhip effect information distortion and supply chain costs with different levels of information quality the results of our analysis enrich the existing literature on the bullwhip effect first we show that the bullwhip effect is magnified along the chain when higher quality information on inventory shrinkage specifically real time rather than statistical data is obtained second we show that the magnification of the bullwhip effect does not necessarily result in higher costs third we demonstrate that higher quality information increases the benefits of information sharing our paper provides new insights into the causes extent and economic dynamics of order variability in the presence of inventory inaccuracy and may thus suggest ways of more effectively managing the bullwhip effect and inventory

to specialize or diversify agricultural diversity and poverty dynamics in ethiopia recent agricultural development policies have begun to shift focus from the promotion of a few staple crops toward encouraging crop diversity the belief is that crop diversification is an effective strategy for dealing with a variety of issues including poverty alleviation however there is a lack of empirical evidence to justify these positions we contribute to filling this research gap by providing quantitative evidence on the impact of diversity in crop cultivation on household poverty using household panel data from ethiopia we develop a diversity index to measure the effect of crop diversity on poverty status to control for endogeneity and selection bias resulting from unobserved heterogeneity we utilize a recently developed parametric method for estimating dynamic binary response models with endogenous contemporaneous regressors our results provide evidence that households which grow a diverse set of crops are less likely to be poor than households that specialize in their crop production additionally crop diversity reduces the probability that a non poor household will fall into poverty and the probability that a poor household will remain in poverty we conclude that crop diversification is a viable way to deal with the exigencies of being poor

on bullwhip in supply chains historical review present practice and expected future impact abstract demand amplification or bullwhip as it is now called is not a new phenomenon since evidence of its existence has been recorded at least as far back as the start of the 20th century and is well known to economists yet industry worldwide still has to cope with bullwhip measured not just in terms of the 2 1 amplification which is frequently quoted but sometimes it is as high as 20 1 from end to end in the supply chain this can be very costly in terms of capacity on costs and stock out costs on the upswing and stockholding and obsolescence costs on the downswing in this paper we have identified 10 published causes of bullwhip all of which are capable of elimination by re engineering the supply chain we offer evidence on the present health of a family of supply chains and pinpoint much good practice this is in anticipation that such excellence will become normative in the near future as the learning experience gathers momentum and provided that human factors are properly addressed

assessing food value chain pathways linkages and impacts for better nutrition of vulnerable groups abstract this article offers insights into assessing the effectiveness of post farm gate agri food value chains at improving the nutrition intake of vulnerable groups it develops a conceptual framework integrating the value chain concepts with agriculture and nutrition and identifies key outcomes and requirements for value chains to be successful at delivering substantive and sustained consumption of nutrient dense foods by poor households other frameworks linking value chains with nutrition have been published but this article provides the analytical lens to assess post farm gate value chains to achieve improvements in the intake of nutritious foods by the target populations food must be safe to eat on a sustained basis nutrient dense at the point of consumption and consumed in adequate amounts on a sustained basis this shifts the focus to the role of public actions and policy in terms of shaping the functioning of food value chains by assessing the limits of what business can and cannot contribute in a given market context policy makers and other relevant stakeholders will be more capable of creating an appropriate institutional environment that shapes how value chains operate for the benefit of vulnerable target groups designing and implementing effective policies and strategies with respect to the role and use of market based interventions

mitigating the bullwhip effect by ordering policies and forecasting methods abstract the bullwhip effect in which order variability increases as one moves up the supply chain has been observed in a range of industries modeled by several authors and various remedies suggested this paper provides a simulation of the effect of improved forecasting methods and finds that holt s and brown s methods substantially mitigate the bullwhip effect across a range of performance metrics the end result is to identify ordering policies that perform particularly well in combination with these forecasting methods and indicate how they can be implemented in practice

the effect of replenishment policies on the bullwhip effect a transfer function approach an important phenomenon in supply chain management known as the bullwhip effect suggests that demand variability increases as one moves up a supply chain this paper examines the influence of different replenishment policies on the occurrence of the bullwhip effect the paper demonstrates that certain replenishment policies can in themselves be inducers of the bullwhip effect while others inherently lower demand variability the main causes of increase in variability are projections of future demand expectations which result in over exaggerated responses to changes in demand we suggest that through appropriate selection and use of certain replenishment rules the bullwhip effect can be avoided subsequently allowing supply chain management costs to be lowered

collective decision making and the limits on the organization s size this essay clarifies the relationship between the technology of organizational decision making and the limits on the size of the group of decision makers within the organization viewing the number and quality of decision makers and the time required for decision making as inputs in the production of collective decisions we show that there exist generic organizational forces that offset the incentive to unlimited expansion of the organization even in a long run competitive environment with perfect markets for managers unlimited duplication of the firm may not be economically feasible we first analyze in a general setting and then illustrate in two stylized examples the interplay between individual decisional quality time required for an individual decision direct and indirect costs of decision making and the optimal number of decision makers for example management size

characterization of the bullwhip effect in linear time invariant supply chains some formulae and tests the authors analyze the bullwhip effect in multistage decentralized supply chains operated with linear and time invariant inventory management policies the focus is on robustness the supply chain is modeled as a single input single output control system driven by arbitrary customer demands the authors derive robust analytical conditions to predict the presence of the bullwhip effect and bound its magnitude based only on the way inventories are managed these results hold independently of the customer demand the authors also characterize the stream of orders placed at any stage of the chain when the customer demand process is known and ergodic and give an exact formula for the variance of the orders placed this formula generalizes existing results by broadening the class of inventory replenishment policies and customer demand processes to which it applies the authors also show that the bullwhip effect can be mitigated by introducing commitments for future orders into the ordering policies

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules