Stability of Information-Sharing Alliances in a Three-Level Supply Chain

33 Pages Posted: 5 Jan 2010

See all articles by Greys Sosic

Greys Sosic

University of Southern California - Marshall School of Business

Date Written: September 1, 2009

Abstract

In their recent paper, Leng and Parlar (L&P) (2008) analyze information-sharing alliances in a three-level supply chain (consisting of a manufacturer, a distributor, and a retailer) which faces a nonstationary end demand. Supply chain members can share demand information, which reduces information distortion and thus decreases their inventory holding and shortage costs. We expand the results from L&P by considering dynamic (farsighted) stability concepts. We use two different allocation rules and show that under some reasonable assumptions there should always be some information sharing in this supply chain. We identify conditions under which the retailer in a stable outcome shares his demand information with the distributor, with the manufacturer, or with both remaining supply chain members.

Keywords: inventory/production, information sharing, alliance stability, coalitions

JEL Classification: C71, D82

Suggested Citation

Sosic, Greys, Stability of Information-Sharing Alliances in a Three-Level Supply Chain (September 1, 2009). Available at SSRN: https://ssrn.com/abstract=1531372 or http://dx.doi.org/10.2139/ssrn.1531372

Greys Sosic (Contact Author)

University of Southern California - Marshall School of Business ( email )

Bridge Hall 308
Los Angeles, CA California 90089
United States

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