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Information sharing in capacity constrained supply chains under lost sales |
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| Authors: | Lauren B Davis Russell E King Thom J Hodgson Wenbin Wei |
| Affiliation: | 1. Department of Industrial and Systems Engineering , North Carolina A&2. T State University , Greensboro, NC, USA lbdavis@ncat.edu;4. Edward P. Fitts Department of Industrial Engineering , North Carolina State University , Raleigh, NC, USA;5. Secondary Marketing, Countrywide Financial Corporation , 4500 Park Granada, MS: CH-140, Calabasas, CA, USA |
| Abstract: | 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. |
| Keywords: | Markov decision process supply chain information sharing |