Information sharing in a make-to-stock supply chain

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October 2014, 10(4): 1169-1189. doi: 10.3934/jimo.2014.10.1169

Information sharing in a make-to-stock supply chain

1.	Department of Logistics Management, School of Economics and Management, Beijing Jiaotong University, Beijing, 100044
2.	Department of Management Science and Engineering, School of Economics and Management, Tsinghua University, Beijing, 100084, China

Received February 2013 Revised September 2013 Published February 2014

Abstract
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This paper addresses how different coordination mechanisms affect the information sharing behavior in a supply chain. We study information sharing in a make-to-stock supply chain under wholesale contract and revenue sharing contract. Under wholesale contract, we show that information sharing is always beneficial to the supplier and identify the conditions ensuring that information sharing is beneficial to the retailer. Under revenue sharing contract, information sharing is beneficial to the supplier, the retailer and the supply chain. This research indicates that whether sharing the demand information is beneficial depends on the coordination mechanism and parameters.

Keywords: make-to-stock, Supply chain management, information sharing, game theory., contract.

Mathematics Subject Classification: Primary: 90B50, 91B06; Secondary: 91A1.

Citation: Juliang Zhang, Jian Chen. Information sharing in a make-to-stock supply chain. Journal of Industrial & Management Optimization, 2014, 10 (4) : 1169-1189. doi: 10.3934/jimo.2014.10.1169

References:

[1]	K. S. Anand and M. Goyal, Strategic information management under leakage in a supply chain,, Management Science, 55 (2009), 438. Google Scholar
[2]	Y. Aviv and A. Federgruen, The operational benefits of information sharing and vendor managed inventory (VMI) programs,, Working Paper, (1998). Google Scholar
[3]	Y. Aviv, On the benefits of collaborative forecasting partnerships between retailers and manufacturers,, Management Science, 53 (2007), 777. doi: 10.1287/mnsc.1060.0654. Google Scholar
[4]	P. Bolton and M. Dewatripont, Contract Theory,, The MIT Press, (2005). Google Scholar
[5]	G. P. Cachon and M. Fisher, Supply chain inventory management and the value of shared information,, Management Science, 46 (2000), 1032. doi: 10.1287/mnsc.46.8.1032.12029. Google Scholar
[6]	G. P. Cachon and M. Lariviere, Supply chain coordination with revenue-sharing contracts: Strengths and limitations,, Management Science, 5 (2005), 30. doi: 10.1287/mnsc.1040.0215. Google Scholar
[7]	S. Cetinkaya and C. Y. Lee, Stock Replenishment and shipment Scheduling for Vendor-Managed Inventory Systems,, Management Science, 46 (2000), 217. doi: 10.1287/mnsc.46.2.217.11923. Google Scholar
[8]	F. Chen, Information sharing and supply chain coordination,, in Handbooks in Operation and Managements Science: Supply Chain Management* (eds. S. Graves and Ton de Kok)*, (2003). doi: 10.1016/S0927-0507(03)11007-9. Google Scholar
[9]	L. Chen and H. Lee, Information sharing and order variability control under a generalized demand model,, Management Science, 55 (2009), 781. doi: 10.1287/mnsc.1080.0983. Google Scholar
[10]	L. B. Davis, R. E. King, T. J. Hodgson and W. Wei, Information sharing in Capacity Constrained Supply Chains,, International Journal of Production Research, 49 (2011), 7469. doi: 10.1080/00207543.2010.535037. Google Scholar
[11]	N. Ebrahim-Khanjari, W. Hopp and S. M. R. Iravani, Trust and information sharing in supply chains,, Working paper, (2011). doi: 10.1111/j.1937-5956.2011.01284.x. Google Scholar
[12]	S. C. Graves, A single-item inventory model for a nonstationary demand process,, Manufacture and Service Operations Management, 1 (1999), 50. doi: 10.1287/msom.1.1.50. Google Scholar
[13]	A. Y. Ha and S. Tong, Contracting and information sharing under supply chain competition,, Management Science, 54 (2008), 701. doi: 10.1287/mnsc.1070.0795. Google Scholar
[14]	A. Y. Ha, S. Tong and H. Zhang, Sharing demand information in competing supply chains with production diseconomies,, Management Science, 57 (2010), 566. doi: 10.1287/mnsc.1100.1295. Google Scholar
[15]	C. Helper, L. B. Davis and W. Wei, Impact of Demand Correlation and Information Sharing in a Capacitated Supply Chain with Multiple Retailers,, Computers and Industrial Engineering, 59 (2010), 552. Google Scholar
[16]	M. Levy and B. A. Weitz, Retailing Management,, 8th edition, (2012). Google Scholar
[17]	H. L. Lee, K. C. So and C. S. Tang, The Value of Information sharing in a two-level supply chain,, Management Science, 46 (2000), 626. doi: 10.1287/mnsc.46.5.626.12047. Google Scholar
[18]	L. Li, Information sharing in a supply chain with horizontal competition,, Management Science, 48 (2002), 1196. doi: 10.1287/mnsc.48.9.1196.177. Google Scholar
[19]	L. Li and H. Zhang, Supply chain information sharing in a competitive environment,, in Supply Chain Structure: Coordination, (2002), 169. doi: 10.1007/978-1-4757-6635-6_6. Google Scholar
[20]	L. Li and H. Zhang, Confidentiality and information sharing in supply chain coordination,, Management Science, 54 (2008), 1467. doi: 10.1287/mnsc.1070.0851. Google Scholar
[21]	B. Mishra, S. Raghunathan and X. Yue, Demand forecast sharing in supply chains,, Production and Operations Management, 18 (2009), 152. doi: 10.1111/j.1937-5956.2009.01013.x. Google Scholar
[22]	B. K. Mishra and S. R. Saghunathan, Retailer vs. vendor managed inventory and brand competition,, Management Science, 50 (2000), 445. doi: 10.1287/mnsc.1030.0174. Google Scholar
[23]	O. Özer, Y. Zheng and K. Y. Chen, Trust in forecast information sharing,, Management Science, 57 (2011), 1111. Google Scholar
[24]	N. Petruzzi and M. Dada, Pricing and the newsvendor problem: A review with extensions,, Operations Research, 47 (1999), 183. doi: 10.1287/opre.47.2.183. Google Scholar
[25]	F. Sahin and E. P. Robinson, Flow coordination and information sharing in supply chains: review, implications and directions for future research,, Decision Sciences, 33 (2002), 505. doi: 10.1111/j.1540-5915.2002.tb01654.x. Google Scholar
[26]	F. Sahin and E. P. Robinson, Information sharing and coordination in make-to-order supply chains,, Journal of Operations Management, 23 (2005), 579. doi: 10.1016/j.jom.2004.08.007. Google Scholar
[27]	Y. L. Yao and M. Dresner, The inventory value of information sharing continuous replenishment, and vendor-managed inventory,, Transportation Research Part E- Logistics and Transportation Review, 44 (2008), 361. doi: 10.1016/j.tre.2006.12.001. Google Scholar
[28]	H. Zhang, Vertical information exchange in a supply chain with duopoly retailers,, Production and Operations Management, 11 (2002), 531. doi: 10.1111/j.1937-5956.2002.tb00476.x. Google Scholar
[29]	T. Zhang, L.Liang and Y. Yu, An integrated vendor-management inventory model for a two-echelon system with order cost reduction,, International Journal of Production Economics, 109 (2007), 241. doi: 10.1016/j.ijpe.2006.12.051. Google Scholar

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References:

[1]	K. S. Anand and M. Goyal, Strategic information management under leakage in a supply chain,, Management Science, 55 (2009), 438. Google Scholar
[2]	Y. Aviv and A. Federgruen, The operational benefits of information sharing and vendor managed inventory (VMI) programs,, Working Paper, (1998). Google Scholar
[3]	Y. Aviv, On the benefits of collaborative forecasting partnerships between retailers and manufacturers,, Management Science, 53 (2007), 777. doi: 10.1287/mnsc.1060.0654. Google Scholar
[4]	P. Bolton and M. Dewatripont, Contract Theory,, The MIT Press, (2005). Google Scholar
[5]	G. P. Cachon and M. Fisher, Supply chain inventory management and the value of shared information,, Management Science, 46 (2000), 1032. doi: 10.1287/mnsc.46.8.1032.12029. Google Scholar
[6]	G. P. Cachon and M. Lariviere, Supply chain coordination with revenue-sharing contracts: Strengths and limitations,, Management Science, 5 (2005), 30. doi: 10.1287/mnsc.1040.0215. Google Scholar
[7]	S. Cetinkaya and C. Y. Lee, Stock Replenishment and shipment Scheduling for Vendor-Managed Inventory Systems,, Management Science, 46 (2000), 217. doi: 10.1287/mnsc.46.2.217.11923. Google Scholar
[8]	F. Chen, Information sharing and supply chain coordination,, in Handbooks in Operation and Managements Science: Supply Chain Management* (eds. S. Graves and Ton de Kok)*, (2003). doi: 10.1016/S0927-0507(03)11007-9. Google Scholar
[9]	L. Chen and H. Lee, Information sharing and order variability control under a generalized demand model,, Management Science, 55 (2009), 781. doi: 10.1287/mnsc.1080.0983. Google Scholar
[10]	L. B. Davis, R. E. King, T. J. Hodgson and W. Wei, Information sharing in Capacity Constrained Supply Chains,, International Journal of Production Research, 49 (2011), 7469. doi: 10.1080/00207543.2010.535037. Google Scholar
[11]	N. Ebrahim-Khanjari, W. Hopp and S. M. R. Iravani, Trust and information sharing in supply chains,, Working paper, (2011). doi: 10.1111/j.1937-5956.2011.01284.x. Google Scholar
[12]	S. C. Graves, A single-item inventory model for a nonstationary demand process,, Manufacture and Service Operations Management, 1 (1999), 50. doi: 10.1287/msom.1.1.50. Google Scholar
[13]	A. Y. Ha and S. Tong, Contracting and information sharing under supply chain competition,, Management Science, 54 (2008), 701. doi: 10.1287/mnsc.1070.0795. Google Scholar
[14]	A. Y. Ha, S. Tong and H. Zhang, Sharing demand information in competing supply chains with production diseconomies,, Management Science, 57 (2010), 566. doi: 10.1287/mnsc.1100.1295. Google Scholar
[15]	C. Helper, L. B. Davis and W. Wei, Impact of Demand Correlation and Information Sharing in a Capacitated Supply Chain with Multiple Retailers,, Computers and Industrial Engineering, 59 (2010), 552. Google Scholar
[16]	M. Levy and B. A. Weitz, Retailing Management,, 8th edition, (2012). Google Scholar
[17]	H. L. Lee, K. C. So and C. S. Tang, The Value of Information sharing in a two-level supply chain,, Management Science, 46 (2000), 626. doi: 10.1287/mnsc.46.5.626.12047. Google Scholar
[18]	L. Li, Information sharing in a supply chain with horizontal competition,, Management Science, 48 (2002), 1196. doi: 10.1287/mnsc.48.9.1196.177. Google Scholar
[19]	L. Li and H. Zhang, Supply chain information sharing in a competitive environment,, in Supply Chain Structure: Coordination, (2002), 169. doi: 10.1007/978-1-4757-6635-6_6. Google Scholar
[20]	L. Li and H. Zhang, Confidentiality and information sharing in supply chain coordination,, Management Science, 54 (2008), 1467. doi: 10.1287/mnsc.1070.0851. Google Scholar
[21]	B. Mishra, S. Raghunathan and X. Yue, Demand forecast sharing in supply chains,, Production and Operations Management, 18 (2009), 152. doi: 10.1111/j.1937-5956.2009.01013.x. Google Scholar
[22]	B. K. Mishra and S. R. Saghunathan, Retailer vs. vendor managed inventory and brand competition,, Management Science, 50 (2000), 445. doi: 10.1287/mnsc.1030.0174. Google Scholar
[23]	O. Özer, Y. Zheng and K. Y. Chen, Trust in forecast information sharing,, Management Science, 57 (2011), 1111. Google Scholar
[24]	N. Petruzzi and M. Dada, Pricing and the newsvendor problem: A review with extensions,, Operations Research, 47 (1999), 183. doi: 10.1287/opre.47.2.183. Google Scholar
[25]	F. Sahin and E. P. Robinson, Flow coordination and information sharing in supply chains: review, implications and directions for future research,, Decision Sciences, 33 (2002), 505. doi: 10.1111/j.1540-5915.2002.tb01654.x. Google Scholar
[26]	F. Sahin and E. P. Robinson, Information sharing and coordination in make-to-order supply chains,, Journal of Operations Management, 23 (2005), 579. doi: 10.1016/j.jom.2004.08.007. Google Scholar
[27]	Y. L. Yao and M. Dresner, The inventory value of information sharing continuous replenishment, and vendor-managed inventory,, Transportation Research Part E- Logistics and Transportation Review, 44 (2008), 361. doi: 10.1016/j.tre.2006.12.001. Google Scholar
[28]	H. Zhang, Vertical information exchange in a supply chain with duopoly retailers,, Production and Operations Management, 11 (2002), 531. doi: 10.1111/j.1937-5956.2002.tb00476.x. Google Scholar
[29]	T. Zhang, L.Liang and Y. Yu, An integrated vendor-management inventory model for a two-echelon system with order cost reduction,, International Journal of Production Economics, 109 (2007), 241. doi: 10.1016/j.ijpe.2006.12.051. Google Scholar

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