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Determination of the optimal degree of information sharing in a two-echelon supply chain

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  • Yeu-Shiang Huang
  • Ming-Chi Li
  • Jyh-Wen Ho

Abstract

Information sharing is beneficial for supply chains, but often has marginally decreasing impacts on profit due to the costly expense of collecting more detailed information. This study aims to determine the optimal degree of information sharing with consideration of the trade-off between the cost of collecting information and the benefits gained by utilising it to enhance the profit of a two-echelon supply chain. Based on the analytical results, the profit that the supplier gains from information sharing can stem from the decrease in inventory cost after having more accurate information about demand. Furthermore, the impacts that the cost of collecting information has on the optimal degree of information sharing are investigated, and the results show that the optimal degree of information sharing is positively correlated to the correlation of successive market demand, that is, when the demand for successive periods is more correlated, information sharing becomes more valuable, and hence the optimal degree of information sharing increases.

Suggested Citation

  • Yeu-Shiang Huang & Ming-Chi Li & Jyh-Wen Ho, 2016. "Determination of the optimal degree of information sharing in a two-echelon supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 54(5), pages 1518-1534, March.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:5:p:1518-1534
    DOI: 10.1080/00207543.2015.1092615
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    Cited by:

    1. Roberto Dominguez & Salvatore Cannella & Borja Ponte & Jose M. Framinan, 2022. "Information sharing in decentralised supply chains with partial collaboration," Flexible Services and Manufacturing Journal, Springer, vol. 34(2), pages 263-292, June.
    2. Dominguez, Roberto & Cannella, Salvatore & Barbosa-Póvoa, Ana P. & Framinan, Jose M., 2018. "Information sharing in supply chains with heterogeneous retailers," Omega, Elsevier, vol. 79(C), pages 116-132.
    3. Avinadav, Tal & Chernonog, Tatyana & Meilijson, Isaac & Perlman, Yael, 2022. "A consignment contract with revenue sharing between an app developer and a distribution platform," International Journal of Production Economics, Elsevier, vol. 243(C).
    4. Lihua Jiang & Wei Chen & Shichang Lu & Zhaoxiang Chen, 2022. "Regulatory Effect on Information Sharing of Industrial Internet Platforms Based on Three Differentiated Game Scenarios," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    5. Dominguez, Roberto & Cannella, Salvatore & Barbosa-Póvoa, Ana P. & Framinan, Jose M., 2018. "OVAP: A strategy to implement partial information sharing among supply chain retailers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 122-136.

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