October  2010, 6(4): 729-750. doi: 10.3934/jimo.2010.6.729

On information quality ranking and its managerial implications

1. 

Department of Mechanical and Industrial Engineering, New Jersey Institute of Technology, Newark, NJ 07102, United States

2. 

Department of Systems Engineering & Engineering Management, Chinese University of Hong Kong, Shatin, New Territory, Hong Kong, China

Received  December 2008 Revised  April 2010 Published  September 2010

We study the quality ranking of different information structures. In a unified setting, we present eight representations of essentially the same notion that may arise in distinct literatures, and also establish the intricate relationships among them. The forms that are less familiar to researchers turn out to be more relevant to the operations management context. We also relate the information structure ranking to concepts often invoked in operations management literature, such as advance demand information and decision postponement. Using some of the established relations, we argue for building a cross-docking facility as close as possible to the distribution centers it serves.
Citation: Jian Yang, Youhua (Frank) Chen. On information quality ranking and its managerial implications. Journal of Industrial and Management Optimization, 2010, 6 (4) : 729-750. doi: 10.3934/jimo.2010.6.729
References:
[1]

P. Billingsley, "Probability and Measure," 3rd edition, John Wiley & Sons, New York, 1995.

[2]

D. Blackwell, Comparison of experiments, Proceedings of the Second Berkeley Symposium on Mathematical Statistics and Probability, University of California Press, (1951), 93-102.

[3]

D. Blackwell, Equivalent comparison of experiments, Annals of Mathematical Statistics, 24 (1953), 265-272. doi: 10.1214/aoms/1177729032.

[4]

H. F. Bohnenblust, L. S. Shapley and S. Sherman, "Reconnaissance in Game Theory," RM-208, The Rand Corporation, 1949.

[5]

C. H. Boll, "Comparison of Experiments in the Infinite Case and the Use of Invariance in Establishing Sufficiency," Ph.D. Dissertation, Department of Statistics, Stanford University, 1955.

[6]

J. Cremer, A simple proof of Blackwell's "Comparison of Experiments'' theorem, Journal of Economic Theory, 27 (1982), 439-443. doi: 10.1016/0022-0531(82)90040-0.

[7]

G. Gallego and Ö. Özer, Integrating replenishment decisions with advance demand information, Management Science, 47 (2001), 1344-1360. doi: 10.1287/mnsc.47.10.1344.10261.

[8]

S. Gavirneni, R. Kapuscinski and S. Tayur, Value of information in capacitated supply chains, Management Science, 45 (1999), 16-24. doi: 10.1287/mnsc.45.1.16.

[9]

J. Green and N. Stokey, Two representations of information structures and their comparisons, Technical Report No. 271, Institute for Mathematical Studies in the Social Sciences, Stanford University, 1978.

[10]

R. Güllü, On the value of information in dynamic production/inventory problems under forecast evolution, Naval Research Logistics, 43 (1996), 289-303. doi: 10.1002/(SICI)1520-6750(199603)43:2<289::AID-NAV8>3.0.CO;2-6.

[11]

R. Hariharan and P. H. Zipkin, Customer-order information, leadtimes, and inventories, Management Science, 41 (1995), 1599-1607. doi: 10.1287/mnsc.41.10.1599.

[12]

J-J. Laffont, "The Economics of Uncertainty and Information," Translated by J. P. Bonin and H. Bonin, The MIT Press, Cambridge, Massachusetts, 1989.

[13]

L. LeCam, Sufficiency and approximate sufficiency, Annals of Mathematical Statistics, 35 (1964), 1419-1455. doi: 10.1214/aoms/1177700372.

[14]

J. Marschak and K. Miyasawa, Economic comparability of information systems, International Economic Review, 9 (1968), 137-174. doi: 10.2307/2525472.

[15]

J. F. Mertens, S. Sorin and S. Zamir, "Repeated Games," CORE, Universite Catholique de Louvain, 1994.

[16]

P. Milgrom and J. Roberts, Communication and inventories as substitutes in organizing production, Scandinavian Journal of Economics, 90 (1988), 275-289. doi: 10.2307/3440309.

[17]

Ö. Özer, Replacement strategies for distribution systems under advance demand information, Management Science, 49 (2004), 255-272.

[18]

S. Sherman, On a theorem of Hardy, Littlewood, Polya, and Blackwell, Proceedings of the National Academy of Science, 37 (1951), 826-831. doi: 10.1073/pnas.37.12.826.

[19]

C. Stein, "Notes on the Comparison of Experiments," Report, University of Chicago, 1951.

[20]

L. B. Toktay, L. B. and L. M. Wein, Analysis of a forecasting-production-inventory system with stationary demand, Management Science, 47 (2001), 1268-1281. doi: 10.1287/mnsc.47.9.1268.9787.

[21]

E. Torgersen, "Comparison of Statistical Experiments," Cambridge University Press, Cambridge, United Kingdom, 1991.

[22]

J. A. Van Mieghem and M. Dada, Price versus production postponement: Capacity and competition, Management Science, 45 (1999), 1631-1649. doi: 10.1287/mnsc.45.12.1631.

[23]

K. Zhu and U. W. Thonemann, Modeling the benefits of sharing future demand information, Operations Research, 52 (2004), 136-147. doi: 10.1287/opre.1030.0061.

show all references

References:
[1]

P. Billingsley, "Probability and Measure," 3rd edition, John Wiley & Sons, New York, 1995.

[2]

D. Blackwell, Comparison of experiments, Proceedings of the Second Berkeley Symposium on Mathematical Statistics and Probability, University of California Press, (1951), 93-102.

[3]

D. Blackwell, Equivalent comparison of experiments, Annals of Mathematical Statistics, 24 (1953), 265-272. doi: 10.1214/aoms/1177729032.

[4]

H. F. Bohnenblust, L. S. Shapley and S. Sherman, "Reconnaissance in Game Theory," RM-208, The Rand Corporation, 1949.

[5]

C. H. Boll, "Comparison of Experiments in the Infinite Case and the Use of Invariance in Establishing Sufficiency," Ph.D. Dissertation, Department of Statistics, Stanford University, 1955.

[6]

J. Cremer, A simple proof of Blackwell's "Comparison of Experiments'' theorem, Journal of Economic Theory, 27 (1982), 439-443. doi: 10.1016/0022-0531(82)90040-0.

[7]

G. Gallego and Ö. Özer, Integrating replenishment decisions with advance demand information, Management Science, 47 (2001), 1344-1360. doi: 10.1287/mnsc.47.10.1344.10261.

[8]

S. Gavirneni, R. Kapuscinski and S. Tayur, Value of information in capacitated supply chains, Management Science, 45 (1999), 16-24. doi: 10.1287/mnsc.45.1.16.

[9]

J. Green and N. Stokey, Two representations of information structures and their comparisons, Technical Report No. 271, Institute for Mathematical Studies in the Social Sciences, Stanford University, 1978.

[10]

R. Güllü, On the value of information in dynamic production/inventory problems under forecast evolution, Naval Research Logistics, 43 (1996), 289-303. doi: 10.1002/(SICI)1520-6750(199603)43:2<289::AID-NAV8>3.0.CO;2-6.

[11]

R. Hariharan and P. H. Zipkin, Customer-order information, leadtimes, and inventories, Management Science, 41 (1995), 1599-1607. doi: 10.1287/mnsc.41.10.1599.

[12]

J-J. Laffont, "The Economics of Uncertainty and Information," Translated by J. P. Bonin and H. Bonin, The MIT Press, Cambridge, Massachusetts, 1989.

[13]

L. LeCam, Sufficiency and approximate sufficiency, Annals of Mathematical Statistics, 35 (1964), 1419-1455. doi: 10.1214/aoms/1177700372.

[14]

J. Marschak and K. Miyasawa, Economic comparability of information systems, International Economic Review, 9 (1968), 137-174. doi: 10.2307/2525472.

[15]

J. F. Mertens, S. Sorin and S. Zamir, "Repeated Games," CORE, Universite Catholique de Louvain, 1994.

[16]

P. Milgrom and J. Roberts, Communication and inventories as substitutes in organizing production, Scandinavian Journal of Economics, 90 (1988), 275-289. doi: 10.2307/3440309.

[17]

Ö. Özer, Replacement strategies for distribution systems under advance demand information, Management Science, 49 (2004), 255-272.

[18]

S. Sherman, On a theorem of Hardy, Littlewood, Polya, and Blackwell, Proceedings of the National Academy of Science, 37 (1951), 826-831. doi: 10.1073/pnas.37.12.826.

[19]

C. Stein, "Notes on the Comparison of Experiments," Report, University of Chicago, 1951.

[20]

L. B. Toktay, L. B. and L. M. Wein, Analysis of a forecasting-production-inventory system with stationary demand, Management Science, 47 (2001), 1268-1281. doi: 10.1287/mnsc.47.9.1268.9787.

[21]

E. Torgersen, "Comparison of Statistical Experiments," Cambridge University Press, Cambridge, United Kingdom, 1991.

[22]

J. A. Van Mieghem and M. Dada, Price versus production postponement: Capacity and competition, Management Science, 45 (1999), 1631-1649. doi: 10.1287/mnsc.45.12.1631.

[23]

K. Zhu and U. W. Thonemann, Modeling the benefits of sharing future demand information, Operations Research, 52 (2004), 136-147. doi: 10.1287/opre.1030.0061.

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