Effects of time aggregation, product aggregation, and seasonality in measuring bullwhip ratio
Fuente:
arXiv
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Preprint |
| Published: |
2024
|
| Subjects: | |
| Online Access: | |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1866913592231591936 |
|---|---|
| author | Ma, Hau Mike Huo, Jiazhen Duan, Yongrui |
| author_facet | Ma, Hau Mike Huo, Jiazhen Duan, Yongrui |
| contents | The bullwhip study has received a lot of attention in the literature, but with conflicting results, especially in the context of data aggregation. In this paper, we investigate three widely studied factors in bullwhip measurement: time aggregation, product aggregation, and seasonality. In time aggregation, we decompose the variance into two components: the expectation of the subset variances and the variance of subset expectations, thus decomposing the bullwhip ratio into four components to explore the underlying mechanism of time aggregation. In product aggregation, the bullwhip ratio is analyzed in the context of products with either uncorrelated or correlated demands and orders. Seasonality is also examined to study its effect on the bullwhip ratio. Our key findings are: (a) Time aggregation can increase, decrease, or maintain the bullwhip ratio in different scenarios. (b) Aggregated bullwhip ratio of uncorrelated products is a weighted average of bullwhip ratios from individual products, with corresponding demand variance as the weights. However, aggregated bullwhip ratio of correlated products could break the boundaries. (c) Seasonality can be considered as a standalone product with a bullwhip ratio of one, which can drive the overall bullwhip ratio closer to one. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2412_00716 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Effects of time aggregation, product aggregation, and seasonality in measuring bullwhip ratio Ma, Hau Mike Huo, Jiazhen Duan, Yongrui General Economics Economics The bullwhip study has received a lot of attention in the literature, but with conflicting results, especially in the context of data aggregation. In this paper, we investigate three widely studied factors in bullwhip measurement: time aggregation, product aggregation, and seasonality. In time aggregation, we decompose the variance into two components: the expectation of the subset variances and the variance of subset expectations, thus decomposing the bullwhip ratio into four components to explore the underlying mechanism of time aggregation. In product aggregation, the bullwhip ratio is analyzed in the context of products with either uncorrelated or correlated demands and orders. Seasonality is also examined to study its effect on the bullwhip ratio. Our key findings are: (a) Time aggregation can increase, decrease, or maintain the bullwhip ratio in different scenarios. (b) Aggregated bullwhip ratio of uncorrelated products is a weighted average of bullwhip ratios from individual products, with corresponding demand variance as the weights. However, aggregated bullwhip ratio of correlated products could break the boundaries. (c) Seasonality can be considered as a standalone product with a bullwhip ratio of one, which can drive the overall bullwhip ratio closer to one. |
| title | Effects of time aggregation, product aggregation, and seasonality in measuring bullwhip ratio |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2412.00716 |