Study on Decisions of Time Competitive Supply Chain from Perspective of Information-Sharing

Abstract

This paper considers a distribution channel of a two echelon time competitive supply chain with one supplier and one downstream retailer facing a product market characterized by short product life and uncertain demand. In addition ， the estimation of demand volatility from the supplier and the retailer is asymmetric. Decision models of optimal planned delivery lead time, ordering, and unit wholesale are established separately under the complete and non-complete information about demand volatility. Compared with the optimal decisions under the complete information on demand volatility, we examine the potential benefits of information sharing and its impacts on the only wholesale price contract, revenue sharing contract, and buyback contract. Results show that the only wholesale price contract cannot reach the channel coordination when the retailer underestimates the demand volatility while the supplier does not, while the reasonable profit sharing contract as well as the buyback contract benefit to facilitate information sharing and to improve the profits of the entire channel. Keywords-information sharing；decisions under uncertainty； distribution channel; time competitive supply chain；game theoryI.(

Coordination of Time‐Varying Price Supply Chain with Inequity‐Averse Retailers

“…Comparing formula (3) and (11), since ( ) is monotonically increasing, * < * ; that is, the optimal order quantity of the retailer in the decentralized system does not reach the optimal order quantity of the ideal centralized system, so the supply chain cannot be coordinated.…”

“…The response time to market demand has become the key factor for supply chain enterprises to win competitive advantages [2]. In the actual supply chain operation, the market demand, cost, and price of products will change with time, so we must consider the influence of time factors on the decision-making and performance of all members in the supply chain [3][4][5][6][7][8][9]. Therefore, supply chain coordination considering price time is more in line with the actual supply chain operation.…”

“…Many scholars have studied the time-varying supply chain. Shen studied the two-level supply chain decisionmaking model in which market demand fluctuates with time, and analyzed the impact of information sharing on such supply chain decision-making [3]. Bai considered the economic batch model of perishable products with timevarying production costs [5].…”