European Journal of Operational Research 212 (2011) 609

Contents lists available at ScienceDirect

European Journal of Operational Research

journal homepage: www.elsevier .com/locate /e jor

Book Review

On Replenishment Rules. Forecasting and the Bullwhip Effect inSupply Chains, Stephen M., Disney., Marc R. Lambrecht (Eds.).Foundations and trends� in technology. Information and Oper-ations Management (2008). Boston-Delft, € 70.00, Book Version(ISBN: 978-1-60198-132-5); € 100, E-book Version (ISBN: 978-1-60198-133-2), pp. xii and 83.

During the last century the terms bullwhip effect, whiplash ef-fect, demand amplification phenomenon, phantom demand, falsedemand, and Forrester flywheel effect have all been used to iden-tify the quintessential dilemma of supply chains: the phenomenonof increasing demand variability in multiechelon system fromdownstream echelons (retail) to upstream echelons (manufactur-ing). In the last decade, increasing attention has been devoted tothis phenomenon and to its deleterious consequences. A GoogleTM

search on the bullwhip effect returned with more than 200,000 re-sults, and Scopus, with more than 500 articles, reports a 36.7%/yrincrease in the average rate of published papers in the period2000–2010. Despite this until 2008 the causes, remedies, method-ological approaches, current and future directions of researchrelated to the bullwhip effect have not been assembled in awide-range, detailed exposition. Stephen M. Disney and MarcR. Lambrecht, two of the most prolific researchers that havecontributed to the bullwhip literature, have written the firstmonograph entirely dedicated to the noxious phenomenon thatmay serve to illustrate, both to managers and researchers, thecomplex world of the greatest inefficiency in supply chains.

The book is organised into seven Chapters. Chapter 1 and 2explains the empirical evidence of the bullwhip effect and thewell-known four causes identified at Procter and Gamble by Lee,Padmanabhan, and Whang are detailed. Moreover, the mostsignificant bullwhip costs and related performance metrics aredescribed. This part of the book is enriched by two creative andinsightful frameworks: A Venn diagram and a causal loop diagramwhich serve to efficiently and elegantly illustrate the causes andconsequences, respectively, of the phenomenon. Chapter 3 is the re-sult of a remarkable taxonomic effort. The authors noticeably reviewand classify the methodological approaches used to study the bull-whip effect, illustrating the strengths and weaknesses of each meth-od. The smoothing replenishment rules (a classical bullwhipavoidance technique) are the subject of Chapter 4. The derivationof the (S, R) Order-Up-To policy with proportional controllers leadsto a trade-off analysis between order and inventory variability costs.Furthermore, the benefits of this order rule are formally proved fordifferent demand patterns and forecasting methods. A further bull-whip avoidance technique (Vendor Managed Inventory) is the topicof Chapter 5 where the benefits and implementation process of thislarge-scale collaboration project are explained. Supply chain coordi-nation is the topic of Chapter 6. Four different cost scenarios are ana-lysed. The illustration of the altruistic retailer scenario is particularlyuseful: an easy-implementable strategy, without re-engineeringefforts at the manufacturer. A further strength of this Chapter lies

doi:10.1016/j.ejor.2011.02.020

in the unambiguous description of how and when lead-times andparameters of the replenishment rules have to be shared by supplychain partners to create coordinated decision-making. The exposi-tion concludes with Chapter 7 that presents stimulating emergingissues and new directions in bullwhip research. The authors suggestfour potential topics for future investigation: multi-product scenar-ios, stochastic lead times, multi-echelon supply chain scenarios andthe square root law for bullwhip.

With a rigorous, formal and modular exposition of the latest re-search on the bullwhip effect, Disney and Lambrecht offer to thescientific and academic world a strategic framework to under-stand, study and avoid the deleterious phenomenon. They suc-ceeded in harmonising qualitative descriptions of bullwhip effect,with formal quantification of the most recent bullwhip dampeningapproaches under several real world conditions and further relatedit to practical implications for supply chain managers. The bookstructure presents an increasing level of complexity. The first partof the book is very useful as an application for practitioners andacademics who wish to understand the causes, economics conse-quences and remedies to bullwhip in a clear manner. In this partwe personally consider the description of the relation betweenbullwhip effect and supply chain costs an excellent example ofhow, in scientific literature, complex topics can be laconically,clearly and fruitfully explained in a managerially accessible man-ner. As the second part of the monograph is concerned with thequantitative tools to avoid the phenomenon. It is explained byaccurate analytical formalisms and a rigorous mathematical back-ground is required from the reader. This part may be a suitable ref-erence point for in-depth research. The book has the merit ofavoiding some minor problems common to other books in whichdifferent authors contribute to the chapters, where there is oftena certain amount of overlap among chapters and the style and def-initions are not always consistent throughout the text. In this case,the authors generate a homogeneous exposition to be read in asequential and logical manner. In summary, we consider the booka valuable contribution to the supply chain management literature.The book can help supply chain managers, university students andresearchers to deepen their knowledge on the tools and strategiesfor better supply chain management.

Salvatore CannellaUniversity of Seville, Spain

E-mail address: cannella@us.es

Elena CianciminoUniversity of Palermo, Italy

E-mail address: eciancimino@unipa.it

Jose M. FraminanUniversity of Seville, Spain

E-mail address: framinan@us.es

Available online 17 March 2011