Assessing the Impact of Prices Fluctuation on Demand Distortion Within a Multi-echelon Supply Chain

Abstract

Price fluctuation is a practice commonly used by companies to stimulate demand and a main cause of the Bullwhip effect. Assuming a staggered step demand pattern that responds elastically to retailerâs price fluctuation, and by using a supply chain management dynamic model, we will analyse the impact of these fluctuations on the variability of the orders placed along a traditional multilevel supply chain. Subsequently, the results obtained will serve to propose a forecasting model enabling to calculate the potential variability of orders placed by each echelon on the basis of the price pattern used. Finally, under the hypothesis of an environment of collaboration between the different members of the chain, we propose a predictive model that makes it possible to quantify the distortion of the orders generated by each level. En este artÃculo se analiza la influencia de la fluctuacion de los precios en la variabilidad de las Ã³rdenes generadas a lo largo de una cadena de suministro tradicional multinivel. Para ello, se utiliza un modelo dinÃ¡mico de gestiÃ³n de ca- dena de suministro en el que se introduce un patrÃ³n de de- manda tipo escalÃ³n, que responde elÃ¡sticamente a la fluc- tuaciÃ³n de los precios ofrecidos por el minorista al cliente final. Posteriormente, utilizando los resultados obtenidos, se propone un modelo de previsiÃ³n para calcular esa posible variaciÃ³n de las Ã³rdenes generadas en cada nivel, a partir del patrÃ³n de precios utilizado.