Contingency Between Elasticityof Demand and Bullwhip Effectin Logistics Chains

  1. Francisco Campuzano-Bolarín 1
  2. Marija Bogataj
  3. Lorenzo Ros-McDonnell 1
  1. 1 Universidad Politécnica de Cartagena

    Universidad Politécnica de Cartagena

    Cartagena, España


Industrial Engineering: Innovative Networks: 5th International Conference on Industrial Engineering and Industrial Management "CIO 2011", Cartagena, Spain, September 2011, Proceedings
  1. Suresh P. Sethi (dir. congr.)
  2. Marija Bogataj (dir. congr.)
  3. Lorenzo Ros-McDonnell (dir. congr.)

Publisher: Springer-Verlag Reino Unido

ISBN: 978-1-4471-2321-7

Year of publication: 2012

Pages: 201-208

Type: Book chapter


This paper discusses how the elasticity of final demand influences the bullwhip amplification when sudden economic changes appear along the entire multi-level supply chain. Increased variability of prices does not affect added value substantially in a supply chain where the price elasticity of demand is small(around 0.1) but with an elasticity of 10 or more, high price variances may result in significant losses. A traditional model of dynamic supply chain structure is used for our study, based on the seminal work of Forrester. A simulation platform for supplychain management with stochastic demand has been developed to study such a phenomenon. Vensim simulation software was used for developing the appropriate supply chain dynamic models. The aim of our study is to gain a deeper insight into theprocesses in a logistic chain, at different elasticities of price demand.