Research On Incentive Mechanism Of Information Sharing In Supply Chains

Information sharing among the members in a supply chain is playing a key role in the supply chain coordination processes. Effective information sharing is helpful to reduce the fluctuation of consumer demand information enlarged in the transferring process upward along the supply chain. It can help the enterprises to deal efficiently with the scheme of production and inventory distribution, to control the amount and flow direction of logistics efficiently, and to lower the supply chain operating cost directly. Information sharing is also beneficial for promoting the mutual trust among the enterprises, improving the ready response ability against the changes of markets. Nevertheless, the members of a supply chain are often reluctant to share their private information, due to benefit pursuit, risk avoidance, moral hazard, and opportunism. Even if they wish to share information to some extent, shared information of both sides is not necessarily completely accurate, wrong decision-making is easier to be made because of the inaccurate even distorted information.In supply chain coordination, the cooperation between the supplier and the retailer is very important. The retailer's sale promotional effort level extremely affects the demand and the sale, and the promotion activities are costly. Due to the increased operating cost, the retailer may not have enough enthusiasm to enlarge investment for those activities, so it requires that supplier should share the cost of effort.The applications of game theory in supply chain coordination are discussed, and various contract types are analyzed firstly. And the states of the art of incentive mechanism of information sharing in supply chains are surveyed, along with the main problems. Secondly, a contract composed of bay back contract and sales rebate contract is used under stochastic demand, and the benefit between supplier and the retailer under the situation of allowing restock is also analyzed based on game theory and mechanism design theory. A hybrid contract is designed to stimulate the retailer to enlarge investment in sales promotion activities in order to gain more profit. And a Stackelberg game model is given for a two-echelon supply chain comprised a supplier and a retailer, which takes sharing information accuracy as a key factor. Finally the relation between supply chain members' benefit and sharing information accuracy is analyzed.