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Bullwhip Effect of Multiple Products with Interdependent Product Demands

  • Srinivasan RaghunathanEmail author
  • Christopher S. Tang
  • Xiaohang Yue
Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 276)

Abstract

The bullwhip effect has been studied extensively by researchers using analytical and empirical models based on a single product. We extend the current theory to provide insights for a firm that manufactures multiple products in a single product category with interdependent demand streams. We find that interdependency between demand streams plays a critical role in determining the existence and magnitude of the bullwhip effect. More importantly, we show that interdependency impacts whether the firm should manage ordering and inventory decisions at the category level or at the product level, and whether the bullwhip effect measure computed at the category level is informative or not.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Srinivasan Raghunathan
    • 1
    Email author
  • Christopher S. Tang
    • 2
  • Xiaohang Yue
    • 3
  1. 1.School of ManagementThe University of Texas at DallasRichardsonUSA
  2. 2.UCLA Anderson SchoolLos AngelesUSA
  3. 3.Lubar School of BusinessThe University of Wisconsin-MilwaukeeMilwaukeeUSA

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