IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v66y2015i2p288-298.html
   My bibliography  Save this article

Impact of information errors on supply chain performance

Author

Listed:
  • Jin Kyung Kwak

    (School of Business, Ewha Womans University, Seoul, South Korea)

  • Srinagesh Gavirneni

    (Johnson Graduate School of Management, Cornell University, Ithaca, USA)

Abstract

This study investigates how information errors affect supply chain performance when a retailer and a supplier share the end-customer demand information. An Enterprise Resource Planning (ERP) system, often used to share information in a supply chain, is not perfect and often contains erroneous information. Companies contemplating the use of ERP systems must evaluate the benefit of using them despite the existence of errors in the system. Our study quantifies the impact of information errors by comparing the supplier costs with and without errors. Our analytical and computational results indicate that the detrimental impact of errors outweighs the beneficial impact of information sharing when the variance of information errors exceeds the variance of end-customer demands. Therefore, when that happens, it is best to operate as if the information is not available. Finally, if it is possible to expend effort and reduce information errors, we present an analytical model for determining the optimal level of investment.

Suggested Citation

  • Jin Kyung Kwak & Srinagesh Gavirneni, 2015. "Impact of information errors on supply chain performance," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 66(2), pages 288-298, February.
    • Handle: RePEc:pal:jorsoc:v:66:y:2015:i:2:p:288-298
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jors/journal/v66/n2/pdf/jors2013175a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jors/journal/v66/n2/full/jors2013175a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nagaraja, Chaitra H. & McElroy, Tucker, 2018. "The multivariate bullwhip effect," European Journal of Operational Research, Elsevier, vol. 267(1), pages 96-106.
    2. 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.
    3. QU, Zhan & RAFF, Horst, 2023. "Two-part tariffs, inventory stockpiling, and the bullwhip effect," European Journal of Operational Research, Elsevier, vol. 308(1), pages 201-214.
    4. Hill, Craig A. & Zhang, G. Peter & Miller, Keith E., 2018. "Collaborative planning, forecasting, and replenishment & firm performance: An empirical evaluation," International Journal of Production Economics, Elsevier, vol. 196(C), pages 12-23.
    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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:66:y:2015:i:2:p:288-298. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.