Agent Based Modelling of Milk and its Productions Supply Chain and Bullwhip Effect Phenomena (Case Study: Kerman)

Abstract

Simulating decision-making process of agents of supply chain is affected by various economic and social factors. In this study it is tried to use the agent based simulation which is a conceptual and computational model and investigates the behavior of the agents of the milk and its products supply chain using data for the year 2016 by emphasizing on dairy farmers against the policy increasing raw milk prices. In this regard, bullwhip effect is one of the important issues raised in supply chain. The present study investigates the presence or absence of bullwhip effect in the milk supply chain and its products, using moving average method and order-up-to-level R. Improvement in supply chain performance is one of the major issues in the current world. Lack of coordination in the supply chain is the main drawback of supply chain that many researchers have proposed different methodologies to overcome it. In addition, the application of agent-based simulation has been investigated in order to improve performance indicator in supply chain. The results obtained from the present study indicated that there is the bullwhip effect in the supply chain, then, the agent managed supply chain has been proposed in order to improve one of the performance indicators in the supply chain. Using centrality in decision-making in the supply chain and agent-based simulation, the results indicated that bullwhip effect is reduced or eliminated for the dairy products. Such results highlight the importance and high potential of agent-based simulation in improving the performance indicator of chain.

Keywords

• agent-based simulation
• bullwhip effect
• demand forecasting
• supply chain
• masq model