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Cash-Flow Bullwhip Effect in the Semiconductor Industry: An Empirical Investigation

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Advances in Production Management Systems. Artificial Intelligence for Sustainable and Resilient Production Systems (APMS 2021)

Part of the book series: IFIP Advances in Information and Communication Technology ((IFIPAICT,volume 631))

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Abstract

Cash flow bullwhip effect (CFB) is the amplification of working capital variance along a supply chain. High CFB is a sign of inefficient working capital (WC) management and can lead to a significant reduction in financial resilience. CFB can be used as a measure of a company’s ability to manage operational risks and corresponding resilience. We investigate the existence of CFB and the traditional bullwhip effect (BWE) in a sample of 238 semiconductor companies over 2010-Q1 to 2020-Q4. These companies' average CFB and BWE are 3.95 and 2.77, respectively. We find that CFB and BWE of a semiconductor company are negatively associated with company size, degree of seasonality in demand, and company’s payment policy conservativeness; and positively associated with procurement and payment lead times.

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Authors and Affiliations

  1. Harold and Inge Marcus Department of Industrial and Manufacturing Engineering, Pennsylvania State University, University Park, PA, 16802, USA

    Chintan Patil & Vittaldas V. Prabhu

Authors
  1. Chintan Patil
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  2. Vittaldas V. Prabhu
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Correspondence to Chintan Patil .

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Editors and Affiliations

  1. IMT Atlantique, Nantes, France

    Alexandre Dolgui

  2. Centrale Nantes, Nantes, France

    Alain Bernard

  3. IMT Atlantique, Nantes, France

    David Lemoine

  4. ZF Friedrichshafen AG, Friedrichshafen, Germany

    Gregor von Cieminski

  5. Tecnológico de Monterrey, Mexico City, Mexico

    David Romero

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Patil, C., Prabhu, V.V. (2021). Cash-Flow Bullwhip Effect in the Semiconductor Industry: An Empirical Investigation. In: Dolgui, A., Bernard, A., Lemoine, D., von Cieminski, G., Romero, D. (eds) Advances in Production Management Systems. Artificial Intelligence for Sustainable and Resilient Production Systems. APMS 2021. IFIP Advances in Information and Communication Technology, vol 631. Springer, Cham. https://doi.org/10.1007/978-3-030-85902-2_8

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  • DOI: https://doi.org/10.1007/978-3-030-85902-2_8

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-85901-5

  • Online ISBN: 978-3-030-85902-2

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