1 AIT Asian Institute of Technology

Mitigate the bullwhip effect and inventory variance in supply chains by use of statistical process control based forecasting system

AuthorZin Di Aung
NoteA thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering in Industrial Engineering and Management
PublisherAsian Institute of Technology
AbstractThe bullwhip effect is the phenomenon that cannot be avoided in the supply chain. Among the causes of bullwhip effect, the demand forecast updating and lead-time are the significant factors which contribute to demand amplification throughout the supply chain. In this research, combining the most rigid forecasting method (moving average) with the control chart to reduce the bullwhip effect and alleviate the inventory variance without affecting the inventory performance is examined. We use the SIMIO simulation software to demonstrate the supply chain model containing a retailer, a wholesaler, a distributor, and a factory. The simulation model is developed by assuming the customer demand follows AR(1) demand process, and periodic review order-up-to policy is applied at each member in the supply chain. From the simulation results, this study proved that reducing lead-time can get more satisfactory outcome (lower bullwhip effect and more stable inventory). Furthermore, the use of control chart can allow the users to adjust in several ways to achieve smoother forecasting. Therefore, control chart-based forecasting can help alleviate the bullwhip effect and to make inventory more balanced
Year2018
TypeThesis
SchoolSchool of Engineering and Technology (SET)
DepartmentDepartment of Industrial Systems Engineering (DISE)
Academic Program/FoSMicroelectronics (ME)
Chairperson(s)Huynh Trung Luong
Examination Committee(s)Voratas Kachitvichyanukul;Mongkol Ekpanyapong
Scholarship Donor(s)AIT Fellowship
DegreeThesis (M.Eng.) -- Asian Institute of Technology, 2018


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