@article{Disney2007,
title = "Controlling bullwhip and inventory variability with the golden smoothing rule",
journal = "European Journal of Industrial Engineering",
volume = "1",
number = "3",
pages = "241-265",
year = "2007",
issn = "1751-5254",
doi = "https://doi.org/10.1504/EJIE.2007.014686",
url = "https://www.researchgate.net/publication/5171304_Controlling_bullwhip_and_inventory_variability_with_the_golden_smoothing_rule",
author = "Stephen M. Disney and Ingrid Farasyn and Marc R. Lambrecht and Denis R. Towill and Wim Van De Velde",
keywords = "Bullwhip effect, supply chain management, inventory management, variance reduction, order-up-to policy, OUT policy, smoothing replenishment, safety stock, net stock variance, inventory variance, feedback control",
abstract = "A major cause of supply chain deficiencies is the bullwhip effect. Supply chain managers experience this variance amplification in both inventory levels and replenishment orders. In this paper, we analyse a major cause of the bullwhip effect, namely the classical Order-Up-To (OUT) policy and suggest a remedy (a smoothing replenishment rule). In general, dampening variability in orders may have a negative impact on customer service due to increase in inventory variance. We quantify the variance of the Net Stock (NS) levels and compute the required safety stock as a function of the smoothing required. The contribution of this paper is the analysis of the tradeoff between bullwhip and inventory variance resulting in a 'golden smoothing rule'. The golden smoothing rule refers to the fact that the values of two proportional feedback controllers are set equal to the Golden Ratio."}