Abstract
We investigate a retailer’s incentive in sharing private demand information with a manufacturer under a linear wholesale price contract. We present a summary of the analysis and the main results of several existing models for the following manufacturer-retailer relationships: one-to-one, two competing chains, one-to-many, and two-to-one. By synthesizing the major findings of these models, we provide a common framework for understanding the impact of some key drivers on the retailer’s information sharing decision. We also illustrate the basic methodology for analyzing related models.
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Notes
- 1.
Specifically, \(\bar{\varPi }_{R} = (a - b)^{2}/16,\) \(\bar{\varPi }_{M} = (a - b)^{2}/8,\) \(\bar{\varPi }= 3(a - b)^{2}/16.\)
- 2.
Specifically, \(\bar{\varPi }_{R} = (a - b)^{2}/[4(2 + c)^{2}]\), \(\bar{\varPi }_{M} = (a - b)^{2}/[4(2 + c)]\), \(\bar{\varPi }= (3 + c)(a - b)^{2}/[4(2 + c)^{2}].\)
- 3.
If the signal Y were perfect, i.e., \(Y =\theta\), we would have \(\mathop{\mathrm{Var}}\nolimits [\theta \vert Y ] = 0\) and \(\lambda = 0\).
- 4.
L M S is the positive value of z satisfying \(4z\left (2 + z\right ) = t\sigma ^{2}(2 + t\sigma ^{2})\), L S is the positive value of z satisfying \((16z + 16z^{2} + 4z^{3})/(3 + z) = t\sigma ^{2}(2 + t\sigma ^{2})\), and \(L^{N} = t\sigma ^{2}(2 + t\sigma ^{2})/(8 + 4t\sigma ^{2} + 2t^{2}\sigma ^{4})\).
- 5.
L M S, L S and L N become infinite if \(t = \infty\).
- 6.
​​​Specifically, \(\bar{\varPi }_{R} = (a - b)^{2}/[4(2 - c)^{2}]\), \(\bar{\varPi }_{M} = (a - b)^{2}/[4(2 - c)]\), \(\bar{\varPi }= (3 - c)(a - b)^{2}/[4(2 - c)^{2}].\)
- 7.
We can show that, when \(\sigma\) and c i 2 are small relative to a, it is optimal for manufacturer i, with a probability very close to one, to fully meet retailer i’s order.
- 8.
One such setting is when retail competition is intense (β close to one), supply chain j is non-communicative (X j  = N) and has accurate information (large t j ), supply chain i has large production diseconomy (large c i ) and inaccurate information (small t i ).
- 9.
The threshold \(Z_{i}^{X_{j}}\) in Proposition 7 becomes arbitrarily high when t 1 and t 2 increases.
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Ha, A.Y., Zhang, H. (2017). Sharing Demand Information Under Simple Wholesale Pricing. In: Ha, A., Tang, C. (eds) Handbook of Information Exchange in Supply Chain Management. Springer Series in Supply Chain Management, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-319-32441-8_17
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DOI: https://doi.org/10.1007/978-3-319-32441-8_17
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