The phenomenon that order quantity is amplified as it travels upstream is known as ‘Bullwhip Effect.’In current studies of bullwhip effect, measuring the bullwhip effect under a specific demand process has been recognized as an important issue. It is well known that the autoregressive demands are one of reason to generate the bullwhip effect. And many researchers tried to develop a mathematical model with strong assumptions to analyze how autoregressive demand and demand parameters affect bullwhip effect.
Meanwhile, existing researches have typically assumed 2 stage supply chain which consists of 1 wholesaler and 1 retailer. Therefore they could not consider the effect by which could occur among multi retailers.
For this reason, this research analyzes the bullwhip effect of 2 stage supply chain which consists of one wholesaler and two retailers. Retailers’ demand is following an autoregressive demand process of order one. Under this condition, we analyze the bullwhip effect through developing a mathematical model for when retailers have different lead time. And we look at the effects of lead time and suggest strategies to relieve the bullwhip effect.