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Research Details

Ration Gaming and the Bullwhip Effect, Operations Research

Abstract

We model a single-supplier, 73-store supply chain as a dynamic discrete choice problem. We estimate the model with transaction-level data, spanning 3,251 products and 1,370 days. We find two interrelated phenomena: the bullwhip effect and ration gaming. To establish the bullwhip effect, we show that shipments from suppliers are more variable than sales to customers. To establish ration gaming, we show that upstream scarcity triggers inventory runs, with stores simultaneously scrambling to amass private stocks in anticipation of impending shortages. These inventory runs increase our bullwhip measures by between 6% and 19%, which corroborates

Type

Article

Author(s)

Robert Bray, Jiazhen Huo, Yuliang Yao

Date Published

2018

Citations

Bray, Robert, Jiazhen Huo, and Yuliang Yao. 2018. Ration Gaming and the Bullwhip Effect. Operations Research.

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