Operations Research, Systems Engineering and Industrial Engineering Commons^™

Information Sharing In Capacity Constrained Supply Chains, Lauren Davis, Russell King, Thom Hodgson, Wenbin Wei

Dr. Lauren B Davis

We present a modelling approach for quantifying the value of information in supply chains using Markov decision processes (MDP). The case where information sharing occurs is modelled using a completely observable MDP. A restricted observation MDP is used to model the case where no information sharing occurs. We illustrate the use of this framework on a two-stage capacity-constrained supply chain consisting of a supplier and a retailer. We quantify the value of information sharing in this setting and construct several performance measures to identify the benefits to both the retailer and supplier as a result of the information sharing partnership.