The bullwhip effect is the phenomenon of increasing demand variability in the supply chain from downstream echelons (retail) to upstream echelons (manufacturing). The objective of this study is to document the strength of the bullwhip effect in industry-level U.S. data. In particular, we say an...

Managers often engage in forecast updating with the expectation that forecast updating reduces expected shortage and inventory costs. One undesirable effect of forecast updating is that it may lead to the bullwhip effect, a phenomenon where the variability of demand increases as one moves up the...

The purpose of this paper is to examine production smoothing in supply chains. Using the controlled setting of the laboratory, we systematically investigate supply chain features that lead to production smoothing. In contrast to prior laboratory studies of the bullwhip effect, we find that the...

We consider a production stage that produces a single item in a make-to-stock manner. Demand for finished goods is stationary. In each time period, an updated vector of demand forecasts over the forecast horizon becomes available for use in production decisions. We model the sequence of forecast...

Two recent papers on managing new product diffusion decisions under production constraints reach somewhat contradictory conclusions. Ho et al. (Ho, T.-H., S. Savin, C. Terwiesch. 2002. Managing demand and sales dynamics in new product diffusion under supply constraint. <i>Management Sci.</i> <b>48</b>(2)...

Empirically, ADF tests fail to reject the null hypothesis that sales are I(1). We build a model of inventory behavior that incorporates permanent sales shocks. Analytically, the model with I(1) sales implies that the variance ratio (of log production to log sales) is one in the long run,...

This paper studies the potential benefits of collaborative forecasting (CF) partnerships in a supply chain that consists of a manufacturer and a retailer. To reflect the reality in production environments, we propose a scorecard that captures inventory considerations, production smoothing, and...

We propose a model in which subcontracting can be explicitly considered as a production planning strategy. Possible market and nonmarket subcontracting mechanisms and their costs are discussed. We show that a class of feasible subcontracting mechanisms in which firms coordinate their production...

This paper presents two methods to solve the production smoothing problem in mixed-model just-in-time (JIT) systems with large setup and processing time variability between different models the systems produce. The problem is motivated by production planning at a leading U.S. automotive pressure...

We consider the problem of smoothing production in a job shop in which all production is to customer order and the demand process is a stationary stochastic process. We present an approach to production smoothing based on the concept of a planning window. A planning window is the difference...