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Using simulation to explore the influence of online reviews on supply chain dynamics

Huang, Shupeng, Potter, Andrew and Eyers, Daniel 2021. Using simulation to explore the influence of online reviews on supply chain dynamics. Computers and Industrial Engineering , 106925. 10.1016/j.cie.2020.106925
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This paper extends existing research on the dynamic behaviour of supply chains by including the influence of online reviews. We model an online supply chain which contains customers and one e-commerce retailer. By using simulation, we compare the dynamic performance in a supply chain for two scenarios, namely adopting online review systems and without adopting the systems. The supply chain dynamic performance is measured by bullwhip effect and inventory variance amplification. The results demonstrate that online review systems increase both the bullwhip effect and inventory variance amplification, and this impact can be moderated by product quality, unit mismatch cost, lead time, and customer volatility. We further explore how our model could be extended to include market competition, dual sourcing, online review manipulation, and product returns. As the increase in the bullwhip effect and inventory variance amplification can be associated with supply chain inefficiency, managers who are aware of such consequence induced by online review adoption can make better decisions in supply chain management.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Additional Information: Released with a Creative Commons Attribution Non-Commercial No Derivatives License (CC BY-NC-ND)
Publisher: Elsevier
ISSN: 0360-8352
Date of First Compliant Deposit: 3 November 2020
Date of Acceptance: 16 October 2020
Last Modified: 17 Feb 2021 15:00

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