American Institute of Mathematical Sciences

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

Information sharing in a make-to-stock supply chain

Juliang Zhang 1, and  Jian Chen 2,

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

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 and 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), 438-452.

[2]

Y. Aviv and A. Federgruen, The operational benefits of information sharing and vendor managed inventory (VMI) programs, Working Paper, (1998), Washington University in St. Louis, St. Louis.

[3]

Y. Aviv, On the benefits of collaborative forecasting partnerships between retailers and manufacturers, Management Science, 53 (2007), 777-794. doi: 10.1287/mnsc.1060.0654.

[4]

P. Bolton and M. Dewatripont, Contract Theory, The MIT Press, Cambridge, Massachusetts, London, England, 2005.

[5]

G. P. Cachon and M. Fisher, Supply chain inventory management and the value of shared information, Management Science, 46 (2000), 1032-1048. doi: 10.1287/mnsc.46.8.1032.12029.

[6]

G. P. Cachon and M. Lariviere, Supply chain coordination with revenue-sharing contracts: Strengths and limitations, Management Science, 5 (2005), 30-44. doi: 10.1287/mnsc.1040.0215.

[7]

S. Cetinkaya and C. Y. Lee, Stock Replenishment and shipment Scheduling for Vendor-Managed Inventory Systems, Management Science, 46 (2000), 217-232. doi: 10.1287/mnsc.46.2.217.11923.

[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), North - Holland, (2003). doi: 10.1016/S0927-0507(03)11007-9.

[9]

L. Chen and H. Lee, Information sharing and order variability control under a generalized demand model, Management Science, 55 (2009), 781-797. doi: 10.1287/mnsc.1080.0983.

[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), 7469-7491. doi: 10.1080/00207543.2010.535037.

[11]

N. Ebrahim-Khanjari, W. Hopp and S. M. R. Iravani, Trust and information sharing in supply chains, Working paper, Department of Industrial Engineering and Management Sciences,Northwestern University, Evanston, IL., (2011). doi: 10.1111/j.1937-5956.2011.01284.x.

[12]

S. C. Graves, A single-item inventory model for a nonstationary demand process, Manufacture and Service Operations Management, 1 (1999), 50-61. doi: 10.1287/msom.1.1.50.

[13]

A. Y. Ha and S. Tong, Contracting and information sharing under supply chain competition, Management Science, 54 (2008), 701-715. doi: 10.1287/mnsc.1070.0795.

[14]

A. Y. Ha, S. Tong and H. Zhang, Sharing demand information in competing supply chains with production diseconomies, Management Science, 57 (2010), 566-581. doi: 10.1287/mnsc.1100.1295.

[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), 552-560.

[16]

M. Levy and B. A. Weitz, Retailing Management, 8th edition, McGraw-Hill, Irwin Companies, 2012 .

[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), 626-643. doi: 10.1287/mnsc.46.5.626.12047.

[18]

L. Li, Information sharing in a supply chain with horizontal competition, Management Science, 48 (2002), 1196-1212. doi: 10.1287/mnsc.48.9.1196.177.

[19]

L. Li and H. Zhang, Supply chain information sharing in a competitive environment, in Supply Chain Structure: Coordination, Information, and optimization, (eds. J. S. Song and D. D. Yao),Kluwer Publisher, Amsterdam, 2002, 169-214. doi: 10.1007/978-1-4757-6635-6_6.

[20]

L. Li and H. Zhang, Confidentiality and information sharing in supply chain coordination, Management Science, 54 (2008), 1467-1481. doi: 10.1287/mnsc.1070.0851.

[21]

B. Mishra, S. Raghunathan and X. Yue, Demand forecast sharing in supply chains, Production and Operations Management, 18 (2009), 152-166. doi: 10.1111/j.1937-5956.2009.01013.x.

[22]

B. K. Mishra and S. R. Saghunathan, Retailer vs. vendor managed inventory and brand competition, Management Science, 50 (2000), 445-457. doi: 10.1287/mnsc.1030.0174.

[23]

O. Özer, Y. Zheng and K. Y. Chen, Trust in forecast information sharing, Management Science, 57 (2011), 1111-1137.

[24]

N. Petruzzi and M. Dada, Pricing and the newsvendor problem: A review with extensions, Operations Research, 47 (1999), 183-194. doi: 10.1287/opre.47.2.183.

[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), 505-536. doi: 10.1111/j.1540-5915.2002.tb01654.x.

[26]

F. Sahin and E. P. Robinson, Information sharing and coordination in make-to-order supply chains, Journal of Operations Management, 23 (2005), 579-598. doi: 10.1016/j.jom.2004.08.007.

[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), 361-378. doi: 10.1016/j.tre.2006.12.001.

[28]

H. Zhang, Vertical information exchange in a supply chain with duopoly retailers, Production and Operations Management, 11 (2002), 531-546. doi: 10.1111/j.1937-5956.2002.tb00476.x.

[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), 241-253. doi: 10.1016/j.ijpe.2006.12.051.

show all references

References:
[1]

K. S. Anand and M. Goyal, Strategic information management under leakage in a supply chain, Management Science, 55 (2009), 438-452.

[2]

Y. Aviv and A. Federgruen, The operational benefits of information sharing and vendor managed inventory (VMI) programs, Working Paper, (1998), Washington University in St. Louis, St. Louis.

[3]

Y. Aviv, On the benefits of collaborative forecasting partnerships between retailers and manufacturers, Management Science, 53 (2007), 777-794. doi: 10.1287/mnsc.1060.0654.

[4]

P. Bolton and M. Dewatripont, Contract Theory, The MIT Press, Cambridge, Massachusetts, London, England, 2005.

[5]

G. P. Cachon and M. Fisher, Supply chain inventory management and the value of shared information, Management Science, 46 (2000), 1032-1048. doi: 10.1287/mnsc.46.8.1032.12029.

[6]

G. P. Cachon and M. Lariviere, Supply chain coordination with revenue-sharing contracts: Strengths and limitations, Management Science, 5 (2005), 30-44. doi: 10.1287/mnsc.1040.0215.

[7]

S. Cetinkaya and C. Y. Lee, Stock Replenishment and shipment Scheduling for Vendor-Managed Inventory Systems, Management Science, 46 (2000), 217-232. doi: 10.1287/mnsc.46.2.217.11923.

[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), North - Holland, (2003). doi: 10.1016/S0927-0507(03)11007-9.

[9]

L. Chen and H. Lee, Information sharing and order variability control under a generalized demand model, Management Science, 55 (2009), 781-797. doi: 10.1287/mnsc.1080.0983.

[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), 7469-7491. doi: 10.1080/00207543.2010.535037.

[11]

N. Ebrahim-Khanjari, W. Hopp and S. M. R. Iravani, Trust and information sharing in supply chains, Working paper, Department of Industrial Engineering and Management Sciences,Northwestern University, Evanston, IL., (2011). doi: 10.1111/j.1937-5956.2011.01284.x.

[12]

S. C. Graves, A single-item inventory model for a nonstationary demand process, Manufacture and Service Operations Management, 1 (1999), 50-61. doi: 10.1287/msom.1.1.50.

[13]

A. Y. Ha and S. Tong, Contracting and information sharing under supply chain competition, Management Science, 54 (2008), 701-715. doi: 10.1287/mnsc.1070.0795.

[14]

A. Y. Ha, S. Tong and H. Zhang, Sharing demand information in competing supply chains with production diseconomies, Management Science, 57 (2010), 566-581. doi: 10.1287/mnsc.1100.1295.

[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), 552-560.

[16]

M. Levy and B. A. Weitz, Retailing Management, 8th edition, McGraw-Hill, Irwin Companies, 2012 .

[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), 626-643. doi: 10.1287/mnsc.46.5.626.12047.

[18]

L. Li, Information sharing in a supply chain with horizontal competition, Management Science, 48 (2002), 1196-1212. doi: 10.1287/mnsc.48.9.1196.177.

[19]

L. Li and H. Zhang, Supply chain information sharing in a competitive environment, in Supply Chain Structure: Coordination, Information, and optimization, (eds. J. S. Song and D. D. Yao),Kluwer Publisher, Amsterdam, 2002, 169-214. doi: 10.1007/978-1-4757-6635-6_6.

[20]

L. Li and H. Zhang, Confidentiality and information sharing in supply chain coordination, Management Science, 54 (2008), 1467-1481. doi: 10.1287/mnsc.1070.0851.

[21]

B. Mishra, S. Raghunathan and X. Yue, Demand forecast sharing in supply chains, Production and Operations Management, 18 (2009), 152-166. doi: 10.1111/j.1937-5956.2009.01013.x.

[22]

B. K. Mishra and S. R. Saghunathan, Retailer vs. vendor managed inventory and brand competition, Management Science, 50 (2000), 445-457. doi: 10.1287/mnsc.1030.0174.

[23]

O. Özer, Y. Zheng and K. Y. Chen, Trust in forecast information sharing, Management Science, 57 (2011), 1111-1137.

[24]

N. Petruzzi and M. Dada, Pricing and the newsvendor problem: A review with extensions, Operations Research, 47 (1999), 183-194. doi: 10.1287/opre.47.2.183.

[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), 505-536. doi: 10.1111/j.1540-5915.2002.tb01654.x.

[26]

F. Sahin and E. P. Robinson, Information sharing and coordination in make-to-order supply chains, Journal of Operations Management, 23 (2005), 579-598. doi: 10.1016/j.jom.2004.08.007.

[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), 361-378. doi: 10.1016/j.tre.2006.12.001.

[28]

H. Zhang, Vertical information exchange in a supply chain with duopoly retailers, Production and Operations Management, 11 (2002), 531-546. doi: 10.1111/j.1937-5956.2002.tb00476.x.

[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), 241-253. doi: 10.1016/j.ijpe.2006.12.051.

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