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2633. Competition and Cost in a Dual Sourcing Supply Chain
Invited abstract in session TC-39: Inventory Models, stream Stochastic Modelling.
Tuesday, 12:30-14:00Room: 35 (building: 306)
Authors (first author is the speaker)
| 1. | Jizhou Lu
|
Abstract
In a supply chain with a manufacturer ordering from two competing suppliers, this study examines how information quality affects information sharing's value and supplier competition. Market demand follows a time-series model. All members use periodic inventory reviews, order-up-to policy, and MMSE forecast method. We analyze various combinations of three information-sharing situations and four information-quality levels. Results show:
1. Supplier demand rises with competitive power, but increased orders mean higher inventory costs and potential savings through sharing. Suppliers should balance these to find optimal competitiveness and gain advantage.
2. Different information errors impact supplier competition. For instance, transmission errors might give one supplier an edge when the manufacturer shares data with both, while source errors do not.
3. Differentiation, including information status and quality, leads to competitive advantage. Suppliers should negotiate for exclusive sharing when no errors or only source errors exist. For transmission errors, enhancing information quality management is advised.
Keywords
- Inventory
- Supply Chain Management
Status: accepted
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