Incentive Mechanism of Supply Chain Inventory Management Based on Information Sharing

Information sharing and inventory management are increasingly recognized as areas generating potential improvements and creating competitive advantage to supply chain. Both of them have been analyzed extensively by number of researchers. However, there are few scholars who have specially discussed on supply chain inventory management from the view of information sharing incentive mechanism. In this paper, we attempt to sum up main theories of incentive mechanism and establish a logic model of information sharing mechanism. On the basis of the incentive theories and the information sharing model, we discuss the revenue equilibrium in supply chain inventory management and hold that designing an incentive mechanism to motivate the partners to share their true information is extremely important. By analyzing the three kinds of equilibrium from the perspective of different information sharing level, we present pricing discount, orders incentive, buy-back, cross shareholding and fair revenue distribution as practical ways to motivate the members to share their information with other partners.