Delayed demand information and dampened bullwhip effect

This paper considers an inventory setting in which the historical data used for demand forecasting is delayed. When the replenishment is controlled via an order-up-to policy, we show that such delays reduce the variability of the order history and dampen the bullwhip effect. We discuss the intuition behind this result. (Key Terms: Information delay; Forecasting; Supply Chain Management; Bullwhip Effect) 1 Department of Information Systems and Decision Sciences, 285 Madison Avenue, Madison, NJ 07940. Tel: (973) 443 8873, Fax: (973) 443 8837, Email: [email protected]. 2 This research is supported in part by a summer grant from Silberman College of Business at Fairleigh Dickinson University. I thank Qing Liu, Rose Twomey, and two editors for their comments on earlier versions of this paper.