THE BULLWHIP EFFECT CALCULATION IN THE TWO-LEVEL SUPPLY CHAIN BY USING MARKOV-SWITCHING MODEL FOR DEMAND FORECASTING

The bullwhip effect in the supply chain could lead to fluctuations such as extra inventory and delayed order. In the meantime, proper demand forecasting can significantly resolve these fluctuations by eliminating the bullwhip effect. The present study considers forecasting of retailer demand, suppliers and calculates the bullwhip effect in the two-level supply chain. Markov switching model and autoregressive model along with moving average are used to predict retail demand and supplier, respectively. The results showed that the lot size policy-based ordering system can reduce or completely remove the bullwhip effect. Besides, the bullwhip effect is appeared in both levels of the supply chain during utilizing the rm(q0,Qm) order-point policy-based ordering system.