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Benefits of information sharing with supply chain partnerships

Zhenxin Yu (The Hong Kong Polytechnic University, Kowloon, Hong Kong)
Hong Yan (The Hong Kong Polytechnic University, Kowloon, Hong Kong)
T.C. Edwin Cheng (The Hong Kong Polytechnic University, Kowloon, Hong Kong)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 1 April 2001

20069

Abstract

The power of information technology can be harnessed to help supply chain members establish partnerships for better supply chain system performance. Supply chain partnerships can mitigate deficiencies associated with decentralized control and reduce the “bullwhip effect”. This study illustrates the benefits of supply chain partnerships based on information sharing. For a decentralized supply chain comprising a manufacturer and a retailer, we derive the members’ optimal inventory policies 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 supply chain members can reap benefits in terms of reductions in inventory levels and cost savings from forming partnerships with one another. A case study is provided for illustration.

Keywords

Citation

Yu, Z., Yan, H. and Edwin Cheng, T.C. (2001), "Benefits of information sharing with supply chain partnerships", Industrial Management & Data Systems, Vol. 101 No. 3, pp. 114-121. https://doi.org/10.1108/02635570110386625

Publisher

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MCB UP Ltd

Copyright © 2001, MCB UP Limited

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