The impact of information sharing in a two-level supply chain with multiple retailers

Abstract

Information sharing is an important component of cooperation in supply chain management. This paper presents a study to evaluate the impact of information sharing on inventory and expected cost in a two-level supply chain with multiple retailers. Three levels of information sharing are given and the optimal inventory policy under each level is derived. We show that both the inventory level and expected cost of the manufacturer decrease with an increase in the level of information sharing.

Keywords:

• supply chain
• information sharing
• inventory

Acknowledgements

This research was supported in part by The Hong Kong Polytechnic University under Grant Number G-YY33 and the National Natural Science Foundation of China under Grant Number 10401043. We are grateful to three anonymous referees for their constructive comments on an earlier version of this paper.