The Bullwhip Effect in Closed Loop Supply Chain

Abstract Improvement of sustainable consciousness lead attention to be paid on reverse supply chain combined with traditional forward supply chain which is called closed loop supply chain. This project develops a simulation in Excel for bullwhip effect measurement in a closed loop supply chain with supplier, manufacturer, wholesaler, retailer, customer and third recycling company. The simulation employs the demand pattern following normal distribution, exponential smoothing and moving average forecast techniques and order-up-to level inventory policy. The reverse supply chain from customer to third recycling company ended at manufacturer to form the closed loop. The results of simulation is analysed by changing the variables including lead time, percentage of recycled and reused bottles, and parameters related to forecast methods. It assists the members of closed loop supply chain to evaluate the forecast method by comparing the bullwhip effect results of two forecast techniques and understand impact of the lead time and its combination at each stage on bullwhip effect so that they can reduce bullwhip effect to improve the performance of closed loop supply chain