Empirical studies of demand signal processing in supply chains
Abstract/Contents
- Abstract
- This dissertation studies "demand signal processing, " how demand information flows through supply chains. We begin with the bullwhip effect, the topic most commonly associated with demand signal processing. After, we study demand signal processing in new context: as a means to infer unobserved operational metrics. The bullwhip effect---a byproduct of demand signal processing---is the amplification of demand variability along a supply chain: a company bullwhips if it purchases from suppliers more variably than it sells to customers. We investigate the bullwhip effect in a sample of 4,689 public U.S. companies over 1974-2008. Overall, we find about two thirds of firms bullwhip. Decomposing the bullwhip by information transmission lead time, we find that demand signals firms observe with more than three quarters' notice drive 30% of the bullwhip, and those firms observe with less than one quarter's notice drive 51%. Demand signal processing, however, is broader than the bullwhip effect: it is a rich process that indicates much about supply chain operations. We develop an empirical supply chain model that enables empiricists to derive operational metrics from patterns in demand signal processing, and perform corresponding counterfactual analyses. The metrics illuminate previously-obscure supply chain aspects, and the counterfactuals permit related "what if" studies. We demonstrate our methodology with six studies and firm-level Compustat data, analyzing (1) whether firms consider their supplier's inventory costs, (2) the convexity of production cost functions, (3) the replenishment rate of depleted inventories, (4) the drivers of the bullwhip effect, (5) the degree to which supply chain alignment mitigates the bullwhip effect, and (6) whether demand forecast accuracy constitutes a supply chain externality.
Description
| Type of resource | text |
|---|---|
| Form | electronic; electronic resource; remote |
| Extent | 1 online resource. |
| Publication date | 2012 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Associated with | Bray, Robert Louis |
|---|---|
| Associated with | Stanford University, Graduate School of Business. |
| Primary advisor | Mendelson, Haim |
| Thesis advisor | Mendelson, Haim |
| Thesis advisor | Lee, Hau Leung |
| Thesis advisor | Whang, Seungjin |
| Advisor | Lee, Hau Leung |
| Advisor | Whang, Seungjin |
Subjects
| Genre | Theses |
|---|
Bibliographic information
| Statement of responsibility | Robert L. Bray. |
|---|---|
| Note | Submitted to the Graduate School of Business. |
| Thesis | Thesis (Ph.D.)--Stanford University, 2012. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2012 by Robert Louis Bray
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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