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Computers & Operations Research
Volume 32, Issue 3, March 2005, Pages 707-725
 
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doi:10.1016/j.cor.2003.08.013    How to Cite or Link Using DOI (Opens New Window)
Copyright © 2003 Elsevier Ltd. All rights reserved.

Information transformation in a supply chain: a simulation study

Gang LiCorresponding Author Contact Information, E-mail The Corresponding Author, a, 1, Shouyang WangE-mail The Corresponding Author, b, 1, Hong YanE-mail The Corresponding Author, c, 2 and Gang YuE-mail The Corresponding Author, d, 3

a School of Economics and Management, Beijing University of Aeronautics and Astronautics, Beijing 100083, China b Academy of Mathematics and Systems Sciences, The Chinese Academy of Sciences, Beijing 100080, China c Department of Logistics, The Hong Kong Polytechnic University, Hong Kong, China d Department of Management Science and Information Systems, McCombs School of Business, The University of Texas at Austin, Austin, TX, USA

Available online 8 October 2003.

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Abstract

We study the information transformation by simulating a multi-stage supply chain when the end customer's demand is a general autoregressive integrated moving average (ARIMA) process, and the information, represented in the form of orders, is propagated from downstream to upstream in the supply chain. Our simulation results indicate several important and novel phenomena that need further theoretical analysis: (1) the anti-bullwhip effect and the transition from the regular bullwhip effect; (2) the trend of information transformation at higher stages of a supply chain; (3) the impact of lead-time on information transformation and the so-called ‘lead-time paradox’. In this paper, we will demonstrate these aspects via extensive computational experiments.

Article Outline

1. Introduction
2. The model and algorithms of simulation
3. The design of the simulation
4. Simulation experiments and results
4.1. The bullwhip effect, anti-bullwhip effect and their transition point
4.2. The trend of information transformation at higher stages of a supply chain
4.3. The impact of the lead-time on information transformation and lead-time paradox
5. Conclusion
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