On human decision behavior in multi-echelon inventory management

Abstract We conducted experiments in a multi-echelon inventory system with two scenarios: no information sharing and full information sharing. The results indicate that the bullwhip effect persists even after traditional causes have been excluded. Moreover, full information sharing cannot guarantee performance improvement. From a behavioral perspective, we analyze different causes of the bullwhip effect for the two scenarios with linear regression models. In addition, we find that the attitudes on two important inventory factors (the on-hand inventory and the stockout) are reversed in the two scenarios. These results may provide managers with useful new ideas for improving performance.