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Asymmetric Information Effect on Transshipment Reporting Strategy
Conference proceeding

Asymmetric Information Effect on Transshipment Reporting Strategy

Yi Liao, Wenjing Shen and Ben Lev
PROCEEDINGS OF THE TENTH INTERNATIONAL CONFERENCE ON MANAGEMENT SCIENCE AND ENGINEERING MANAGEMENT, v 502, pp 445-454
01 Jan 2017

Abstract

Computer Science Computer Science, Artificial Intelligence Computer Science, Interdisciplinary Applications Science & Technology Technology
Lateral transshipments in multi-echelon stochastic inventory system imply that locations at the same echelon of a supply chain share inventories in some way, in order to deal with local uncertainties in demands. While a large body of research studies inventory transshipment issues, few papers have considered the effect of information on transshipment reporting decisions. We analyze the transshipment decisions after demand realization under a decentralized setting with asymmetric information concerning demand. In this research, the shortage demand information at one retailer is not public and the shortage retailer may manipulate this number in order to obtain the optimal transshipment amount. We not only demonstrate that the shortage retailer can distort the actual shortage number to improve its profit, but also identify when to use under-reporting or over-reporting policy. Furthermore, we also explore the reporting policy when the surplus retailer only informs the shortage retailer its surplus inventory distribution or mean and variance.

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Computer Science, Artificial Intelligence
Computer Science, Interdisciplinary Applications
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