Vertical cost information sharing in a supply chain with value-adding retailers

Yao, Dong‐Qing; Yue, Xiaohang; Liu, John

doi:10.1016/j.omega.2006.04.003

Cited by 130 publications

(73 citation statements)

References 16 publications

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“…Our work is the extension of work done by Yao et al in 2008, where it is studied retailers' incentives for valueadded cost information sharing and indicated that the retailers are not always better off with information sharing. Here, we add cooperative advertising contract to the model and demonstrate that the manufacturer with cooperative advertising program can encourage the retailers to share their information.…”

Section: Introductionmentioning

confidence: 83%

“…They demonstrated that with confidentiality and intense competition, all parties have an incentive to share their information. Yao et al (2008) examined incentives for value-added cost information sharing in a supply chain consisting of one supplier and two value-adding heterogeneous retailers who compete on both added value and retail price. Wu et al (2012) considered a two-echelon supply chain with a single manufacturer and two retailers, and investigated the retailers' incentives for demand information sharing.…”

Section: Literature Reviewmentioning

confidence: 99%

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Incentive mechanism based on cooperative advertising for cost information sharing in a supply chain with competing retailers

2017

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This paper proposes a new motivation for information sharing in a decentralized channel consisting of a single manufacturer and two competing retailers. The manufacturer provides a common product to the retailers at the same wholesale price. Both retailers add their own values to the product and distribute it to consumers. Factors such as retail prices, values added to the product, and local advertising of the retailers simultaneously have effect on market demand. Each retailer has full information about the own added value which is unknown to the manufacturer and other retailer. The manufacturer uses a cooperative advertising program for motivating the retailers to disclose their private information. A numerical study is presented to compare different scenarios of information sharing. Computational results show that there is a condition in which full information sharing is beneficial for all members of the supply chain through cooperative advertising program and, therefore, retailers have enough incentive to disclose their cost information to the manufacturer.

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Section: Introductionmentioning

confidence: 83%

Section: Literature Reviewmentioning

confidence: 99%

Incentive mechanism based on cooperative advertising for cost information sharing in a supply chain with competing retailers

2017

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“…Mukhopadhyay et al [21] and Cao et al [22] examine cost information sharing in a dual-channel supply chain. Mukhopadhyay et al [21] extend Yao et al 's [20] study to a dual-channel setting. The cost coefficient of value-added service is assumed to be unknown by others.…”

Section: Literature Reviewmentioning

confidence: 89%

“…Also, some researchers focus on cost information sharing in a supply chain. For example, in Yao et al [20], two retailers add value to goods by improving their service after wholesaling from a manufacturer, and the coefficient in the cost of adding value is uncertain. All the above papers only consider a single-channel structure in a supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on Cost Information Sharing and Channel Choice in a Dual-Channel Supply Chain

Liu

Sun²,

Ming

et al. 2016

Mathematical Problems in Engineering

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Many studies examine information sharing in an uncertain demand environment in a supply chain. However there is little literature on cost information sharing in a dual-channel structure consisting of a retail channel and a direct sales channel. Assuming that the retail sale cost and direct sale cost are random variables with a general distribution, the paper investigates the retailer's choice on cost information sharing in a Bertrand competition model. Based on the equilibrium outcome of information sharing, the manufacturer's channel choice is discussed in detail. Our paper provides several interesting conclusions. In both single-and dualchannel structures, the retailer has little motivation to share its private cost information which is verified to be valuable for the manufacturer. When the cost correlation between the two channels increases, our analyses show that the manufacturer's profit improves. However, when channel choice is involved, the value of information could play a different role. The paper finds that a dual-channel structure can benefit the manufacturer only when the cost correlation is sufficiently low. In addition, if the cost correlation is weak, the cost fluctuation will bring out the advantage of a dual-channel structure and adding a new direct channel will help in risk pooling.

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“…Cost-information sharing has also been researched by several scholars. For example, Yao et al [30] explored cost-information sharing in a SC by considering value-added costs as retailers' private information. Liu et al [31] examined the interplay between VCIS and channel choices.…”

Section: Related Workmentioning

confidence: 99%

Vertical Cost-Information Sharing in a Food Supply Chain with Multiple Unreliable Suppliers and Two Manufacturers

Wang

2017

Journal of Food Quality

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This paper considers a food supply chain where multiple suppliers provide completely substitutable food products to two manufacturers. Meanwhile, the suppliers face yield uncertainty and the manufacturers face uncertain production costs that are private information. While the suppliers compete on price, the manufacturers compete on quantity. We build a stylized multistage game theoretic model to analyze the issue of vertical cost-information sharing (VCIS) within the supply chain by considering key parameters, including the level of yield uncertainty, two manufacturers' cost correlation, the correlated coefficient of suppliers' yield processes, and the number of suppliers. We study the suppliers' optimal wholesale price and the manufacturers' optimal order quantities under different VCIS strategies. Finally, through numerical analyses, we examine how key parameters affect the value of VCIS to each supplier and each manufacturer, respectively. We found that the manufacturers are willing to share cost information with suppliers only when the two manufacturers' cost correlation is less than a threshold. While a high correlated coefficient of suppliers' yield processes and a large number of suppliers promote complete information sharing, a high level of yield uncertainty hinders complete information sharing. All these findings have important implications to industry practices.

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Vertical cost information sharing in a supply chain with value-adding retailers

Cited by 130 publications

References 16 publications

Incentive mechanism based on cooperative advertising for cost information sharing in a supply chain with competing retailers

Incentive mechanism based on cooperative advertising for cost information sharing in a supply chain with competing retailers

Research on Cost Information Sharing and Channel Choice in a Dual-Channel Supply Chain

Vertical Cost-Information Sharing in a Food Supply Chain with Multiple Unreliable Suppliers and Two Manufacturers

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