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How information influences the cost of transport in a supply chain, a monte carlo simulation

Xavier Brusset ()

Econometrics from EconWPA

Abstract: The present paper studies the impact of information sharing and contractual instruments on a shipper and her transport suppliers through a monte carlo simulation. After reviewing the literature, we propose a model to measure the benefits in terms of expected transport cost and variance of this cost. We evaluate three scenarios over a reiterated- single period setting in a shipper carrier single-echelon model with a mix of long-term and short-term procurement strategies: perfect information, asymmetric information and private information at one level of the supply chain. After spelling out the optimal parameters for the procurement policy, we evaluate the rent transfer between carrier and shipper in a numeric example using the monte-carlo method.

Keywords: supply chain management; transport; contract; monte carlo; bivariate normal distribution; information (search for similar items in EconPapers)
JEL-codes: L14 L23 C44 C61 C62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-cmp
Date: 2005-12-07
Note: Type of Document - pdf; pages: 49. A monte carlo simulation to show the importance of asymetrical information in transport cost and distribution of this cost between a shipper and a carrier.
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