Competition and cooperation in a two-stage supply chain with demand forecasts

Journal Article

We consider a serial supply chain with one supplier and one retailer. Each obtains some demand forecast information, which may be shared or not. We investigate the members' benefits from sharing information. The forecasts follow a variant of the Martingale model of forecast evolution (MMFE). We construct a simple transfer-payment scheme to align the players' incentives with that of the overall system. The main finding is that, unless the players' incentives are aligned in this way, sharing information makes little sense. It might hurt one or the other player and the system as a whole. ©2010 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Iida, T; Zipkin, P

Published Date

  • 2010

Published In

Volume / Issue

  • 58 / 5

Start / End Page

  • 1350 - 1363

International Standard Serial Number (ISSN)

  • 0030-364X

Digital Object Identifier (DOI)

  • 10.1287/opre.1100.0809