TY - BOOK
T1 - An analysis of the effect of response speed on the Bullwhip effect using control theory
AU - Udenio, M.
AU - Fransoo, J.C.
AU - Vatamidou, E.
AU - Dellaert, N.P.
PY - 2013
Y1 - 2013
N2 - In this paper, we use linear control theory to analyze the performance of a firm generating
material orders as a function of the difference between actual inventory and pipeline
and their respective targets (APIOBPCS: Automatic Pipeline, Variable Inventory Order
Based Production Systems). We explicitly model managerial behavior by allowing fractional
–instead of full– adjustments to be performed in each period, thus introducing a
proxy to the firms’ reactiveness to changes. We develop a new procedure for the determination
of the exact stability region for such a system, and derive an asymptotic region
of stability that gives a sufficient stability criteria independent of the lead time. We then
quantify the performance of the system by analyzing the effect of different demand signals
on order and inventory variations. We find that firms with low reactiveness perform well in
the presence of stationary demands but perform poorly when encountering finite demand
shocks. Furthermore, we find that the ratio of the reactiveness of inventories and pipeline
affects both the performance, and robustness of the system. When the inventory is more
reactive than the pipeline the system can achieve increased performance at the cost of
being sensitive to the parameters. When the pipeline is more reactive than inventories,
on the other hand, the system is robust, but at the cost of sub-optimal performance.
AB - In this paper, we use linear control theory to analyze the performance of a firm generating
material orders as a function of the difference between actual inventory and pipeline
and their respective targets (APIOBPCS: Automatic Pipeline, Variable Inventory Order
Based Production Systems). We explicitly model managerial behavior by allowing fractional
–instead of full– adjustments to be performed in each period, thus introducing a
proxy to the firms’ reactiveness to changes. We develop a new procedure for the determination
of the exact stability region for such a system, and derive an asymptotic region
of stability that gives a sufficient stability criteria independent of the lead time. We then
quantify the performance of the system by analyzing the effect of different demand signals
on order and inventory variations. We find that firms with low reactiveness perform well in
the presence of stationary demands but perform poorly when encountering finite demand
shocks. Furthermore, we find that the ratio of the reactiveness of inventories and pipeline
affects both the performance, and robustness of the system. When the inventory is more
reactive than the pipeline the system can achieve increased performance at the cost of
being sensitive to the parameters. When the pipeline is more reactive than inventories,
on the other hand, the system is robust, but at the cost of sub-optimal performance.
M3 - Report
T3 - BETA publicatie : working papers
BT - An analysis of the effect of response speed on the Bullwhip effect using control theory
PB - Technische Universiteit Eindhoven
CY - Eindhoven
ER -