The value of information sharing in a two-level supply chain. (English) Zbl 1231.90044

Lee, Hau L.; So, Kut C.; Tang, Christopher S.

Manage. Sci. 46, No. 5, 626-643 (2000).

Summary: Many companies have embarked on initiatives that enable more demand information sharing between retailers and their upstream suppliers. While the literature on such initiatives in the business press is proliferating, it is not clear how one can quantify the benefits of these initiatives and how one can identify the drivers of the magnitudes of these benefits. Using analytical models, this paper aims at addressing these questions for a simple two-level supply chain with nonstationary end demands. Our analysis suggests that the value of demand information sharing can be quite high, especially when demands are significantly correlated over time.

MSC:

90B05	Inventory, storage, reservoirs
91B44	Economics of information
90B70	Theory of organizations, manpower planning in operations research

Keywords:

supply chain management; mathematical models; production planning; inventory control