Decision Making and Cognition in Multi-Echelon Supply Chains: An Experimental Study

Arunachalam Narayanan, Brent B. Moritz

Research output: Contribution to journalArticlepeer-review

58 Scopus citations


Supply chain performance often depends on the individual decisions of channel members. Even when individuals have access to relevant information, order variation tends to increase when moving up the supply chain, a phenomenon known as the bullwhip effect. While prior research has investigated several structural/environmental factors which can mitigate the bullwhip effect, the underlying behavioral factors contributing to it are an open question. Using a production and distribution decision-making simulation representing a four-stage serial supply chain, we find that the cognitive profile of decision makers contributes to the bullwhip effect. We found that the specific decision tendency to underweight the supply line is linked to an individual's level of cognitive reflection. Furthermore, performance differs for entire supply chains and for specific echelons, and holds under standard mitigation efforts. The findings have implications for supply chain design, education, and industry.

Original languageEnglish (US)
Pages (from-to)1216-1234
Number of pages19
JournalProduction and Operations Management
Issue number8
StatePublished - Aug 1 2015

All Science Journal Classification (ASJC) codes

  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering
  • Management of Technology and Innovation


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