A Study on Various Forecasting Methods and Their Effects on the Bullwhip Effect and Inventory in the Simulated Supply Chain

Abstract

This study conducted a simulation of a four-echelon linear supply chain measuring the bullwhip effect and inventory-related markers of each echelon within the system. The research model is examined using both fixed demand with a sudden change in its pattern and 20 various stochastic demands. Simple exponential, Holt’s exponential smoothing, and Brown’s double exponential smoothing methods are employed to predict the demand, and the smoothing replenishment ordering system is utilized in placing orders. Results revealed that the supply chain performs the best when using the simple exponential method. Simple exponential method’s superiority is notable in all the markers observed.