Modelling the benefits of information sharing-based partnerships in a two-level supply chain

Abstract

This paper presents a study aimed at quantifying the benefits of information sharing-based supply chain partnerships. We derive the optimal inventory policies for the manufacturer and the retailer in a two-level decentralized supply chain under different information sharing scenarios. We show that increasing information sharing among the members in a decentralized supply chain will lead to Pareto improvement in the performance of the entire chain. Specifically, the manufacturer can obtain benefits in terms of reductions in inventory levels and cost savings.

Keywords:

• supply chain
• partnerships
• information sharing
• inventory control
• quick response
• Pareto improvement