Study on Decisions of Time Competitive Supply Chain from Perspective of Information-Sharing

This paper considers a distribution channel of a two echelon time competitive supply chain with one supplier and one downstream retailer facing a product market characterized by short product life and uncertain demand. In addition, the estimation of demand volatility from the supplier and the retailer is asymmetric. Decision models of optimal planned delivery lead time, ordering, and unit wholesale are established separately under the complete and non-complete information about demand volatility. Compared with the optimal decisions under the complete information on demand volatility, we examine the potential benefits of information sharing and its impacts on the only wholesale price contract, revenue sharing contract, and buyback contract. Results show that the only wholesale price contract cannot reach the channel coordination when the retailer underestimates the demand volatility while the supplier does not, while the reasonable profit sharing contract as well as the buyback contract benefit to facilitate information sharing and to improve the profits of the entire channel.