Vertical value-added cost information sharing in a supply chain

Abstract

We study a two-echelon supply chain with two homogeneous manufacturers and one common retailer who has full knowledge about his own value-added service cost structure that is unknown to the manufacturers. The retailer may choose to disclose his cost information to the manufacturers. Using a three-stage game-theoretic model, we derive optimal pricing strategies for each participant, and optimal information sharing strategies, and the optimal level of the value-added services for the retailer. Our study also reveals when the manufacturers should accept the disclosed information by the retailer. It is shown that information sharing does not always create a win–win situation among the partners in the supply chain. When the value-added service cost efficiency is low, the retailer is willing to share complete information with the manufacturers; however, information sharing harms the manufacturers’ profits if they accept the shared information. In contrast, when the value-added service cost efficiency is high, the common retailer has no incentive to share information with the manufacturers and the unique equilibrium is no information sharing. Finally, we utilize a revenue-sharing contract to achieve supply chain coordination and induce information sharing under asymmetric information.

Decisions for Blockchain Adoption and Information Sharing in a Low Carbon Supply Chain

“…Therefore, some enterprises provide value-added services to attract low-carbon consumers. In general, cost data associated with value-added services is often considered private information for retailers [19]. In practice, supply chain members usually possess private information that is unknown to outsiders, so they are inclined to protect their cost information to maximize profits [20].…”

“…In practice, supply chain members usually possess private information that is unknown to outsiders, so they are inclined to protect their cost information to maximize profits [20]. Asymmetry in value-added service efficiency affects optimal price decisions and service investments [19,21]. Thus, the question arises as to whether retailers will share information about value-added services with manufacturers.…”

“…In addition, this study does not consider the sunk costs associated with adopting blockchain technology. The value-added service cost function is strictly convex followed by Liu et al [19] and Yao et al [21],…”

Optimising small-scale electronic commerce supply chain operations: a dynamic cost-sharing contract approach

“…Their findings showed that sharing information is not always beneficial in competitive scenarios. Similarly, Liu et al (2021) considered a two-echelon supply chain with two homogeneous manufacturers and a retailer to study retailer's decisions on sharing cost information about the value-added services. They found that the optimal level for value-added services is mainly determined by the retailer's service cost efficiency and information sharing does not always create a win-win situation in a supply chain.…”

Resources Facilitating Information Sharing in Sweet Corn Supply Chain, Chiang Mai

“…According to the findings of Ha and Tong [33], they showed that contracts of generating information sharing is essential as a value driver of information sharing and the ability to share information in order to gain a competitive advantage under competition between supply chains. Furthermore, contracts are also used to promote coordination and encourage information sharing in case of information asymmetry [34]. H6: Contract influences opportunities to share information.…”