Title: The impact of information sharing and risk pooling on bullwhip effect avoiding in container shipping markets

Authors: Shaorui Li; Jing Chen; Yi Liao; Yujie Shi

Addresses: Department of Logistics Management, Southwestern University of Finance and Economics, Chengdu, 610074, China ' Rowe School of Business, Dalhousie University, Halifax, Nova Scotia, B3H 4R2, Canada ' Department of Logistics Management, Southwestern University of Finance and Economics, Chengdu, 610074, China ' Beijing Jingcheng New Energy Co., Ltd., Beijing, 100040, China

Abstract: The bullwhip effect is a well-known phenomenon that can be explained as the effect that demand variance is exaggerated as it moves upstream in a supply chain. Though the bullwhip effect has been extensively addressed, studies on its impact on the container shipping market have been neglected. Therefore, we consider a two-stage supply chain model, consisting of a shipping company and two shippers, and propose an integrated analytical model to quantify the beneficial impact on the handle of bullwhip effect by simultaneously incorporating information sharing and risk pooling. We not only analytically demonstrate the suggested approach can significantly reduce the amplification of demand variability, but also confirm that our method outperforms the current approaches numerically. Finally, by implementing the proposed approach in the Shanghai and Hong Kong container shipping markets, we illustrate that our method can dramatically improve the supply chain's performance in practice.

Keywords: supply chain management; SCM; service supply chains; container shipping markets; bullwhip effect; information sharing; risk pooling; two-stage supply chains; integrated analytical modelling; demand variability; Shanghai; Hong Kong; supply chain performance; China.

DOI: 10.1504/IJSTL.2016.077308

International Journal of Shipping and Transport Logistics, 2016 Vol.8 No.4, pp.406 - 424

Available online: 07 Jun 2016 *

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