Production Smoothing and the Bullwhip Effect

• 成果类型: Article
• 署名作者: Bray, Robert L.; Mendelson, Haim
• 署名单位: Northwestern University; Stanford University
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2014.0513
• 发表日期: 2015
• 页码: 208-220
• 关键词: production smoothing; Bullwhip Effect; demand signal processing; generalized order-up-to policy; martingale model of forecast evolution

摘要

The bullwhip effect and production smoothing appear antithetical because their empirical tests oppose one another: production variability exceeding sales variability for bullwhip, and vice versa for smoothing. But this is a false dichotomy. We distinguish between the phenomena with a new production smoothing measure, which estimates how much more variable production would be absent production volatility costs. We apply our metric to an automotive manufacturing sample comprising 162 car models and find 75% smooth production by at least 5%, despite the fact that 99% exhibit the bullwhip effect. Indeed, we estimate both a strong bullwhip (on average, production is 220% as variable as sales) and robust smoothing (on average, production would be 22% more variable without deliberate stabilization). We find firms smooth both production variability and production uncertainty. We measure production smoothing with a structural econometric production scheduling model, based on the generalized order-up-to policy.