Patrick Saoud, Nikolaos Kourentzes and John Boylan, ISF2018, 20th June 2018
Many supply chains experience the Bullwhip effect, defined as the upstream amplification of demand variability. This information distortion results in a misalignment of forecasts, generating expensive business costs. A proposed remedy in the literature is the sharing of Point of Sales information data among the members of the supply chain. The theoretical and empirical results have pointed in different directions, with the empirical evidence suggesting that information sharing helps achieve better forecasting accuracy. A less studied facet of the Bullwhip is the effect of promotions on it, which was highlighted as one of its four original sources. This research is dedicated to examining the effect of promotions and other demand shocks on the performance of the different tiers of the supply chain. In particular, it will study the impact of promotions on forecasting accuracy, Bullwhip propagation and safety stocks for the participants of the supply chain. Furthermore, it will also investigate the impact of different types of information sharing in this context on the Supply Chain, and compare their performance in terms of gains in forecasting accuracy.