Comparative study of Bullwhip effect in Centralized and Decentralized supply chain of an FMCG industry

Abstract

The choice of supply chain strategy significantly impacts competitive performance of Business organizations.The purpose of this paper is to quantify and compare the bullwhip effects in centralized and decentralized supply chain of a Fast Moving Consumer Good (FMCG) industry.This paper aims to distinguish between two strategies of supply chain in terms of bullwhip effect present between the stages of each strategy. Bullwhip effects are quantified by simulation and validated by analytical method to study the variations in demands at different stages of supply chain. Moving average forecasting method is used for simulations. The paper gives guidelines to managers in supply chain about the importance of selection of strategy for maximizing profit and reducing bullwhip effect.