This work was stimulated by a comment made by a former student (Prof. Alan Erera of Georgia Tech) in connection with an inventory stabil ity game he was going to play in one of his logistics classes. This was the well-known "beer-game" that is often played in business schools to illus trate the "bullwhip" effect in supply chains. Al had said to me that he did not have to tell his students how to reorder replacement parts from the other members of the supply chain because he knew from experience that the order sizes the players would generate as the game progressed would become chaotic anyhow. Since I had not played the beer game, his asser tion was intriguing to me. Why would such an unstructured game always lead to the same undesirable effect? Did it have something to do with psy chology? What is it that players did to generate instabilities? I posed these to other people but could not get completely satisfactory an questions swers. Thus, the bullwhip mystery remained, at least in my mind. Since inventory chains are "conservative" systems analogous to a traffic stream, and since traffic flow models exhibit similar effects (the instability of automobile platoons and of certain numerical methods being two nota ble examples)' I suspected that traffic flow theory might shed some light on the puzzle.

Keywords

Authors and Affiliations

University of California, Berkeley, USA

Carlos F. Daganzo

Bibliographic Information

Book Title: A Theory of Supply Chains
Authors: Carlos F. Daganzo
Series Title: Lecture Notes in Economics and Mathematical Systems
DOI: https://doi.org/10.1007/978-3-642-18152-8
Publisher: Springer Berlin, Heidelberg
eBook Packages: Springer Book Archive
Copyright Information: Springer-Verlag Berlin Heidelberg 2003
Softcover ISBN: 978-3-540-00288-8Published: 13 February 2003
eBook ISBN: 978-3-642-18152-8Published: 06 December 2012
Series ISSN: 0075-8442
Series E-ISSN: 2196-9957
Edition Number: 1
Number of Pages: VIII, 125
Topics: Economic Theory/Quantitative Economics/Mathematical Methods, Operations Management, IT in Business

Publish with us

Policies and ethics

Authors:

Sections

Buy it now

Buying options

Other ways to access

Table of contents (7 chapters)

Front Matter

Introduction

Algorithms / Policies

Algorithmic Properties

Stability and Monotonicity Requirements

Strongly Stable Policies: The Act Method

Cost Estimation and Optimization

Discussion

Back Matter

About this book