Order and inventory variance amplification: the equivalence of discrete and continuous time analyses

Warburton, Roger D. H. and Disney, Stephen Michael ORCID: https://orcid.org/0000-0003-2505-9271 2007. Order and inventory variance amplification: the equivalence of discrete and continuous time analyses. International Journal of Production Economics 110 (1-2) , pp. 128-137. 10.1016/j.ijpe.2007.02.021

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Abstract

The well-known “Bullwhip Effect” concerns the increasing variance of orders as they proceed through the supply chain. In the continuous time representation we solve the delay-differential equation for the inventory balance, which is coupled to the ordering policy. The time domain evolution of the system emerges. We calculate the Bullwhip Effect and compare it to known results for the discrete time representation. The discrete and continuous Bullwhip Effect expressions have similar structures. We show that the two domains are managerially equivalent so that in practice either domain can be used to study a supply chain.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics) Centre for Advanced Manufacturing Systems At Cardiff (CAMSAC)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HF Commerce
Uncontrolled Keywords:	Inventory; Order-Up-To policy; Bullwhip; Lambert W Function
Publisher:	Elsevier
ISSN:	0925-5273
Related URLs:	http://www.sciencedirect.com/science/art...
Last Modified:	21 Oct 2022 09:52
URI:	https://orca.cardiff.ac.uk/id/eprint/38104

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