EURO 2024 Copenhagen
Abstract Submission

EURO-Online login

2891. Mitigating the bullwhip effect on supply chains with multiple retailers by horizontal information sharing

Invited abstract in session WD-23: Information sharing in sustainable supply chains, stream Circular Economy, Remanufacturing and Recycling .

Wednesday, 14:30-16:00
Room: 82 (building: 116)

Authors (first author is the speaker)

1. Martin Hrusovsky
WU Vienna University of Economics and Business
2. Emel Arıkan
Department of Information Systems and Operations, WU Vienna University of Economics and Business
3. Lena Silbermayr
Department of Information Systems and Operations, WU Vienna University of Economics and Business

Abstract

Bullwhip effect describes the increasing magnitude of fluctuations in orders in the upstream direction within supply chains that lack proper coordination due to various reasons. One of them is incomplete information sharing about demands, orders or inventory levels, which is caused by the reluctance of supply chain actors to share sensitive information that might increase their vulnerability in negotiations or leak to other actors, e.g. competitors. As a consequence, full information sharing is very often not applied in practice despite its positive effects confirmed by a vast amount of research papers.

As an alternative, we propose to use cryptographic methods, such as secure multi-party computation or homomorphic encryption, that enable to share necessary information (e.g. a certain demand signal or trend) without revealing the exact values of each individual partner. We implement this approach on a 4-stage supply chain with multiple retailers using order-up-to policy where the information about average market demand is shared horizontally between the retailers. In our test we consider factors such as demand variation, correlation of demand or number of retailers sharing the information between each other and we show the positive effect that this information sharing has on mitigating the bullwhip effect.

Keywords

Status: accepted

Back to the list of papers