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On the effect of non-optimal forecasting methods on supply chain downstream demand

Ali, M. M. and Boylan, John (2012) On the effect of non-optimal forecasting methods on supply chain downstream demand. IMA Journal of Management Mathematics, 23 (1). pp. 81-98. ISSN 1471-678X

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Abstract

Demand information sharing is used by many organizations to counter the bullwhip effect. A stream of recent papers claims that the upstream member can mathematically infer the demand at the downstream link (downstream demand inference [DDI]) without any formal information sharing mechanism. In this paper, we investigate DDI when non-optimal forecasting methods are employed by supply chains. We show that in the case of a simple moving average forecast, the demand at the downstream link can be inferred. In the case of single exponential smoothing (SES), downstream demand cannot be inferred and thus needs to be shared. Finally, we quantify the value of sharing demand information when SES is employed.

Item Type: Article
Journal or Publication Title: IMA Journal of Management Mathematics
Additional Information: Accepted February 9th 2011
Uncontrolled Keywords: supply chain management ; bullwhip effect ; downstream demand inference ; forecast information sharing ; single exponential smoothing ; simple moving average
Subjects:
Departments: Lancaster University Management School > Management Science
ID Code: 72990
Deposited By: ep_importer_pure
Deposited On: 20 Feb 2015 05:09
Refereed?: Yes
Published?: Published
Last Modified: 20 Sep 2017 02:03
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/72990

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