A silver bullet for bullwhip effect: minimizing lead-time

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Choi, Soochan
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Middle Tennessee State University
The Bullwhip effect is information twisting that creates movement of wasteful products over what the market requires within a supply chain. There are four causes; demand signal processing, the rational game, batch ordering, and price variation (Lee at el, 2004). Current researchers are providing superior solutions, especially in coordination and information sharing methodology (Lee at el(1997), Moyaux at el(2007), Wu at ell(2006), Sahin at ell(2002), Disney at el(2008), Fiala at el(2005), Xu at el(2001) Paik at el(2007). However, the two prevailing solutions are required to “trust” to each other. Cooperation is hard to be accomplished until the companies fully open their information. In addition, the degree of trust is not easy to measure. Other problems arise when the trust is not fully accomplished. How could we measure cooperation? There are ways for measuring cooperation but it is not a general methods. In addition, it depends on analyzers point of view of cooperation. In this sense, I am going to provide another solution: decreasing lead time that it can be measured easily while proving that decreasing lead time is time saver and more cost effective than other suggested solutions.
Bullwhip effect, Toyota Production System, Lead Time, Geographic Information System