Publications

Aggregated retailers’ total order to the supplier is one of the factors that contribute to the Bullwhip effect in two-echelon supply chains. Though the estimation of the variance of the total of orders is hard to be computed, this paper contribution is to provide two approximations to the ratio of the aggregated retailer orders variance at the supplier side with respect to the market demand variance. Using these approximations few managerial insights can be considered in real practice based on retailers’ , inventory policies and a supplier fixed periodic review inventory policy. In addition an optimal review period is derived that minimizes the variance ratio in the case of low market demand rate.