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Modelling the benefits of information sharing-based partnerships in a two-level supply chain

Author

Listed:
  • Z Yu

    (The Hong Kong Polytechnic University)

  • H Yan

    (The Hong Kong Polytechnic University)

  • T C E Cheng

    (The Hong Kong Polytechnic University)

Abstract

This paper presents a study aimed at quantifying the benefits of information sharing-based supply chain partnerships. We derive the optimal inventory policies for the manufacturer and the retailer in a two-level decentralized supply chain under different information sharing scenarios. We show that increasing information sharing among the members in a decentralized supply chain will lead to Pareto improvement in the performance of the entire chain. Specifically, the manufacturer can obtain benefits in terms of reductions in inventory levels and cost savings.

Suggested Citation

  • Z Yu & H Yan & T C E Cheng, 2002. "Modelling the benefits of information sharing-based partnerships in a two-level supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(4), pages 436-446, April.
    • Handle: RePEc:pal:jorsoc:v:53:y:2002:i:4:d:10.1057_palgrave.jors.2601255
    DOI: 10.1057/palgrave.jors.2601255
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    Citations

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    Cited by:

    1. Ali, Mohammad M. & Babai, Mohamed Zied & Boylan, John E. & Syntetos, A.A., 2017. "Supply chain forecasting when information is not shared," European Journal of Operational Research, Elsevier, vol. 260(3), pages 984-994.
    2. M M Ali & J E Boylan, 2011. "Feasibility principles for Downstream Demand Inference in supply chains," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(3), pages 474-482, March.
    3. Ding, Huiping & Guo, Baochun & Liu, Zhishuo, 2011. "Information sharing and profit allotment based on supply chain cooperation," International Journal of Production Economics, Elsevier, vol. 133(1), pages 70-79, September.
    4. Babai, M.Z. & Boylan, J.E. & Syntetos, A.A. & Ali, M.M., 2016. "Reduction of the value of information sharing as demand becomes strongly auto-correlated," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 130-135.
    5. T C E Cheng & Y N Wu, 2005. "The impact of information sharing in a two-level supply chain with multiple retailers," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(10), pages 1159-1165, October.
    6. Yan, Ruiliang, 2010. "Demand forecast information sharing in the competitive online and traditional retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 17(5), pages 386-394.
    7. Bauso, Dario & Giarré, Laura & Pesenti, Raffaele, 2009. "Distributed consensus in noncooperative inventory games," European Journal of Operational Research, Elsevier, vol. 192(3), pages 866-878, February.
    8. Pearson, Michael, 2007. "Goodwill hunting and profit sharing: Decision-making in a newspaper chain," European Journal of Operational Research, Elsevier, vol. 181(3), pages 1593-1606, September.
    9. Wang, Jian-Cai & Lau, Hon-Shiang & Lau, Amy Hing Ling, 2008. "How a retailer should manipulate a dominant manufacturer's perception of market and cost parameters," International Journal of Production Economics, Elsevier, vol. 116(1), pages 43-60, November.
    10. N Lehoux & S D'Amours & Y Frein & A Langevin & B Penz, 2011. "Collaboration for a two-echelon supply chain in the pulp and paper industry: the use of incentives to increase profit," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(4), pages 581-592, April.
    11. Sabitha, Devarajulu & Rajendran, Chandrasekharan & Kalpakam, S. & Ziegler, Hans, 2016. "The value of information sharing in a serial supply chain with AR(1) demand and non-zero replenishment lead times," European Journal of Operational Research, Elsevier, vol. 255(3), pages 758-777.
    12. Huy Chhaing & Eiji Takeda, 2004. "The Effect of Partial Information Sharing in a Two-Level Supply Chain," Discussion Papers in Economics and Business 04-02, Osaka University, Graduate School of Economics.
    13. Lu, Jizhou & Feng, Gengzhong & Shum, Stephen & Lai, Kin Keung, 2021. "On the value of information sharing in the presence of information errors," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1139-1152.
    14. Sari, Kazim, 2008. "On the benefits of CPFR and VMI: A comparative simulation study," International Journal of Production Economics, Elsevier, vol. 113(2), pages 575-586, June.
    15. E-H Aghezzaf, 2008. "Robust distribution planning for supplier-managed inventory agreements when demand rates and travel times are stationary," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(8), pages 1055-1065, August.
    16. Tliche, Youssef & Taghipour, Atour & Canel-Depitre, Béatrice, 2020. "An improved forecasting approach to reduce inventory levels in decentralized supply chains," European Journal of Operational Research, Elsevier, vol. 287(2), pages 511-527.
    17. Kristianto, Yohanes & Helo, Petri & Jiao, Jianxin (Roger) & Sandhu, Maqsood, 2012. "Adaptive fuzzy vendor managed inventory control for mitigating the Bullwhip effect in supply chains," European Journal of Operational Research, Elsevier, vol. 216(2), pages 346-355.
    18. Babai, M.Z. & Ali, M.M. & Boylan, J.E. & Syntetos, A.A., 2013. "Forecasting and inventory performance in a two-stage supply chain with ARIMA(0,1,1) demand: Theory and empirical analysis," International Journal of Production Economics, Elsevier, vol. 143(2), pages 463-471.
    19. Khan, Mehmood & Hussain, Matloub & Saber, Hussein M., 2016. "Information sharing in a sustainable supply chain," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 208-214.
    20. Mu-Chen Chen & Taho Yang & Chi-Tsung Yen, 2007. "Investigating the value of information sharing in multi-echelon supply chains," Quality & Quantity: International Journal of Methodology, Springer, vol. 41(3), pages 497-511, June.
    21. Kwak, Jin Kyung & Gavirneni, Srinagesh, 2011. "Retailer policy, uncertainty reduction, and supply chain performance," International Journal of Production Economics, Elsevier, vol. 132(2), pages 271-278, August.
    22. R Fildes & K Nikolopoulos & S F Crone & A A Syntetos, 2008. "Forecasting and operational research: a review," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(9), pages 1150-1172, September.

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