Measure of bullwhip effect - a dual sourcing model

The bullwhip effect in which the demand in the upstream section of a supply chain is distorted gives rise to an unfavourable phenomenon. Most of the existing research studies have investigated the bullwhip effect under a single sourcing environment. However, in this research the behaviour of the bullwhip effect under a dual sourcing environment for a first‐order autoregressive [AR(1)] demand process using an analytical approach is examined. The conditions under which the bullwhip effect is reduced in the dual sourcing environment in comparison to that in the single sourcing environment are subsequently derived.