Publication Type

Journal Article

Version

publishedVersion

Publication Date

2008

Abstract

This paper discusses the importance of and a solution to separating the information flow from the physical product flow in a supply chain. Motivated by the inefficient demand forecast caused by information asymmetry and lack of an incentive among supply chain partners to share valuable information, we propose a radically new framework called collective outsourcing to market (COM) to address many information supply chain design challenges. To validate the COM framework, we consider a supply chain with one manufacturer and multiple downstream retailers. Retailers privately acquire demand forecast information that they do not have incentive to share horizontally with other retailers or vertically with the upstream manufacturer. We consider two alternative market mechanisms that can be used to outsource the information-intensive demand forecasting task for the whole supply chain. The specially organized market can be viewed as a cost effective way of acquiring quality information that, at the same time, aligns individual retailers' incentives to credibly share their private information. We further discuss the real world implementation issues including market design and the costs and benefits of proposed solutions.

Keywords

information supply chain, market mechanism, outsourcing, demand forecasting

Discipline

Computer Sciences | Management Information Systems | Numerical Analysis and Scientific Computing

Research Areas

Information Systems and Management

Publication

Journal of the Association for Information Systems

Volume

9

Issue

4

First Page

98

Last Page

118

ISSN

1536-9323

Identifier

10.17705/1jais.00157

Publisher

Association for Information Systems

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.17705/1jais.00157

Download

Share

COinS