The Value of Information Sharing

This chapter proposes a model to study the effects of inventory policy, pricing decision, and product substitution on the value of information sharing. The value of information sharing has been studied widely in the literature. To simplify models, prior research usually studies a supply chain with one product. However, modern supply chain models often produce and distribute ranges of products. Moreover, manufacturers and retailers define prices for products based on demand forecast and inventory levels or they even compete by using pricing decisions. Carefully reading the extant literature, the authors found that no existing articles considers the inter-relationship of inventory policy, pricing decision, and product substitution when studying the value of information sharing. The proposed model in this chapter will help to provide insights on the value of information sharing and fill the gap in the literature.