Model retraining and information sharing in a supply chain with long-term fluctuating demands

Takahiro Ezaki; Naoto Imura; Katsuhiro Nishinari

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arXiv · 2109.01784

Model retraining and information sharing in a supply chain with long-term fluctuating demands

Takahiro Ezaki·Naoto Imura·Katsuhiro Nishinari

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Abstract

Demand forecasting based on empirical data is a viable approach for optimizing a supply chain. However, in this approach, a model constructed from past data occasionally becomes outdated due to long-term changes in the environment, in which case the model should be updated (i.e., retrained) using the latest data. In this study, we examine the effects of updating models in a supply chain using a minimal setting. We demonstrate that when each party in the supply chain has its own forecasting model, uncoordinated model retraining causes the bullwhip effect even if a very simple replenishment policy is applied. Our results also indicate that sharing the forecasting model among the parties involved significantly reduces the bullwhip effect.

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Takahiro Ezaki, Naoto Imura, Katsuhiro Nishinari. 2021-09-04. Model retraining and information sharing in a supply chain with long-term fluctuating demands. https://arxiv.org/abs/2109.01784

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