Evaluating Information Sharing Strategies in Supply Chains

This paper evaluates the impact of information sharing strategies on the performance of a supply chain. We consider three forms of information sharing strategies: (1) order information sharing where every stage of the supply chain only knows the orders from its immediate downstream stage; (2) demand information sharing where every stage has full information about the market demand; (3) inventory information sharing where each stage shares its inventory levels and demand information with its immediate upstream stage. Our results indicate that information sharing improves supply chain performance when demand is relatively stable. More importantly, we find that a hybrid information sharing strategy, which uses demand information sharing in the distribution network of the supply chain while using inventory information sharing in the supplier network, is the ideal strategy to improve supply chain performance when demand mix is volatile