Modeling and Bullwhip Effects Control of Internet plus Supply Chain

This paper exploits the modeling and bullwhip effect control problem of two-layered supply chain with the impact of internet to flow direction of consumer demand. For uncertainty and randortiness of demand is one of the cause of bullwhip effect, this paper aims to give the model of two-layered supply chain with the flow direction of consumer demand suffered the affection of internet, and study the bullwhip effect control problem from the perspective of controlling fluctuation of inventory and derivation of demand order. First, stochastic variable satisfying Bernoulli distribution are introduced to characterize the internet impact to demand, then nominal system is used to deduce the corresponding inventory deviation system, with its bullwhip effect problem formulated as a linear quadratic control problem according to the corresponding inventory deviation system. The supply chain system which highlights the stochastic impact of internet to demand on the bullwhip effect, can he considered as the Main contribution of this paper. By separation principle, the feedback controller is given by Riccati equations and classical Kalman filter approach, the impact of internet to bullwhip effect control problem is analyzed. Numerical simulation illustrates the effectiveness of the control law to eliminate the bullwhip effect.