Optimal production and inventory rationing policies with selective-information sharing and two demand classes
| Autor: | Sheng Hao Zhang, Yi Wang |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
050210 logistics & transportation
021103 operations research Information Systems and Management General Computer Science Process (engineering) Information sharing 05 social sciences 0211 other engineering and technologies Rationing 02 engineering and technology Management Science and Operations Research Industrial and Manufacturing Engineering Value of information Dynamic programming Microeconomics Distribution system Order (exchange) Modeling and Simulation 0502 economics and business Production (economics) Business |
| Zdroj: | European Journal of Operational Research. 288:394-407 |
| ISSN: | 0377-2217 |
| DOI: | 10.1016/j.ejor.2020.05.051 |
| Popis: | This paper studies the impact of partner selection on the value of information sharing in a distribution system with one capacitated make-to-stock manufacturer and two retailers. When the high priority retailer with a higher shortfall cost is the sole partner, in the case that the low priority one places an order, the manufacturer allocates inventory more accurately according to more predictable orders from the high priority retailer. When only the low priority retailer shares information, the manufacturer is better informed about orders from this retailer, which shall trigger rationing decisions. Such intriguing differences in utilizing information from two prioritized retailers further induce different interactions between production and rationing policies and form two distinctive but closely related selective-information sharing systems. We characterize the manufacturer’s optimal production and rationing policies under both systems. Through a numerical study, we emphasize the effectiveness of partnering with the high priority retailer. When the manufacturer can establish information sharing links with only one retailer, such a choice usually brings more benefits despite differences in order sizes and/or demand rates of the two retailers. When a selective-information sharing system is the pilot run to full-information sharing, we find that the value of information throughout the implementation process often exhibits second-mover advantage and such a choice also helps the manufacturer create a more balanced return pattern. Finally, we illustrate that the cost-effectiveness of inventory rationing can be significant and optimally rationing inventory is the prerequisite for the superior of the selective-information sharing system with the high priority retailer. |
| Databáze: | OpenAIRE |
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