Information sharing based on two-way perceptions of trust and supply chain decisions: A simulation based approach

Abstract

Mutual trust between enterprises is regarded as the most important issue in the study of supply chain partnership. The main purpose is to find how trust affects supply chain decisions and to suggest a coordination contract to improve supply chain performance. The results show that the trust-based contract has positive effect on the long-term cooperation. Although high residual value products can earn more market revenue in the price discount contract, it does not stabilize the trust relationship among supply chain enterprises. Enterprises need to improve their ability to predict market demand in order to increase revenue and expand supply chain cooperation. As long as the manufacturer's forecast is more accurate, the discount strategy can not only improve supply chain performance, but also strengthen the trusts between supply chain partners.