On bullwhip in a family of order-up-to policies with ARMA(2,2) demand and arbitrary lead-times

Herein, we investigate the behaviour of the proportional order up to policy for ARMA(2,2) demand with arbitrary lead-times. In order to compensate for possible weaknesses of the proportional OUT policy we propose another replenishment rule that accounts for the characteristics of the demand in a superior manner. The characteristics of both policies are compared for several parameter settings of the ARMA(2,2) model. Finally, the consequences of our full-state-feedback order-up-to policy are discussed.