Multi-perspective analysis of monetary effects of information sharing between supply chain partners

Abstract

While most of information sharing literature in supply chain (SC) management mainly deals with the analysis and quantification of information sharing to upstream actors by downstream actors, this paper quantitatively deals with the two-way information sharing. The setup of a dyadic SC is considered. Informed by complexity, principal-agent and information sharing theory a hybrid simulation model combining dynamic programming and agent-based modeling is built to measure and analyze the effects of information sharing scenarios (none / one-sided / two-sided) on the profit in the entire SC as well as of the individual participating actors. The results show that information exchange is valued differently depending on the actors‘ point of view in the SC. For both the entire SC and the manufacturer, the highest profits can be expected from two-way information exchange, while the supplier maximizes its profits when solely sharing upstream information. We prove that due to higher expected profits, information sharing can enable companies to achieve higher performance in the SC. Additionally, we show that different power structures, which are reflected by transfer pricing between the actors, do not result in any change in information sharing preferences. Building on the study's results theoretical and practical implications are derived.