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What is the value of an online retailer sharing demand forecast information?

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Abstract

Online retailers take into account history clicks when forecasting product market demand. Assuming that online retailers can forecast the market demand accurately, this study focuses on a supply chain composed of one online retailer together with multiple suppliers. When an online retailer determines an order quantity, the amount of maximum inventory is decided on the basis of “current demand plus safety stock,” rather than “average of historical demand plus safety stock.” This study investigates the influence that market demand information sharing among online retailers has on both the bullwhip effect on the supply chain and on a supplier’s inventory level. The results prove that market demand information sharing between online retailers can reduce the bullwhip effect on the supply chain, and can also reduce a supplier’s inventory level. In addition, the demand correlation coefficient in a continuous cycle has the most significant impact on influencing the value of information sharing.

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Acknowledgements

This paper has received funding from the National Natural Science Foundation, China (71573067, 71271062). And thanks Jinhu Huang for his help in the construction of mathematical model.

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Authors and Affiliations

  1. SEM, Harbin Engineering University, Harbin, Heilongjiang, China

    Jinlou Zhao, Hui Zhu & Shuang Zheng

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  1. Jinlou Zhao
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  2. Hui Zhu
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  3. Shuang Zheng
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Correspondence to Shuang Zheng.

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The authors declare that they have no conflict of interest.

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Communicated by X. Li.

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Zhao, J., Zhu, H. & Zheng, S. What is the value of an online retailer sharing demand forecast information?. Soft Comput 22, 5419–5428 (2018). https://doi.org/10.1007/s00500-018-3091-3

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  • DOI: https://doi.org/10.1007/s00500-018-3091-3

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