The Impact of Information Sharing Strategies in Multi-level Supply Chain Xiongwei Zhou, Feicheng Ma, Ling Zhang, Xueying Wang
School of Information Management Wuhan University Wuhan, P.R.China E-mail:firstname.lastname@example.org@whu.edu.cn
Abstract- Information sharing is a major strategy to counteract the bullwhip effect. Previous research suggested that applying different ISS(information sharing strategy) to the supply chain may improve the supply chain performance under a simplified two-level supply chain model. In this paper, we present a simulation study that investigates the effectiveness of information sharing under different information sharing strategy scenarios within a complex multi-level supply chain model. In our research, a computer model is developed to simulate the complex multi-level supply chain model. The simulation data and results analysis show both distributors and suppliers gain significantly from information sharing no matter under different information sharing strategy except retailers and different information sharing strategy has great influence on supply chain performance. Keywords- information sharing; information sharing strategy; bullwhip effect; multi-level supply chain model; simulation
Supply chain collaboration has a major impact on an organization's ability to meet customer needs and reduce costs, especially under demand uncertainty. It has become a research focus. While a key step in supply chain collaboration is to share information among the supply chain partners. And information sharing is also viewed as a major strategy to counteract the bullwhip effect [1,2,3,4]. So evaluating the effectiveness or the value of information sharing becomes hot issue[5,6].Previous research indicated the effectiveness of information sharing on supply chain. Other research suggested that applying different ISS to the supply chain under different demand patterns may improve the supply chain performance[8,9,13,14]. But the supply chain model of their research was two-level or simplified. What's more their research is independent and did not connect the two factors which are information sharing and information sharing strategy. Till now, very little research has been done about the effectiveness of information sharing and whether different ISS improve the supply chain performance in complex multilevel supply chain. Z.Huang and A.Gangopadhyay put forward that the inventory costs and backorder penalties are measured in evaluating the supply chain performance, but it is limited because the function is not an expression. We improve on it and put forward an approximately simplifying
expression based on it, which helps us to take a computer simulation approach in investigating the impact of information sharing among trading partners on supply chain performance in different information sharing strategies in the complex multi-level supply chain model. Z. Huang and A. Gangopadhyay use a comprehensive supply chain model. In fact, their model is simplified: 1) Only two different parameters, low and high, are used to present different levels of uncertainty demand fluctuation by random number generator. 2) Their research doesn't take into account the demand forecasting. 3) In their research different levels of inventory buffer instead of a specific inventory model are used, and they only examine three different ranges of inventory buffer levels: 100%-150%, 150%-200%, and 200%250%. In this paper, we put forward an improved multi-level supply chain model based on these unlimited. And we compare the impact of different information sharing strategy by building a new supply chain performance function. Especially we use computer program to simulate the different parameters in random number generator which are used to present different levels of uncertainty demand fluctuation under different information sharing strategy scenarios. II. INFORMATION SHARING STRATEGY IN SCM Supply chain management...
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