Cooperative Pricing Under Forecasting Sharing in the Manufacturer-E-Retailer Supply Chain

Ruiliang Yan and Sanjoy Ghose
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Ruiliang Yan: Virginia State University, USA
Sanjoy Ghose: University of Wisconsin-Milwaukee, USA

International Journal of Information Systems and Supply Chain Management (IJISSCM), 2008, vol. 1, issue 2, 1-18

Abstract: With the rapid development of the Internet, many retailers and individuals nowadays use this technology to engage in direct e-retailing sales. In this article, we investigate the value of demand-forecast information sharing in a manufacturer-e-retailer supply chain. The value of market information depends not only on its accuracy, but also on the e-retailer’s market power and the product’s Web compatibility. We develop a theoretical approach to examine the value of information sharing for the manufacturer and the e-retailer first, and then we further check to see how information sharing is moderated by the e-retailer’s market share and the product’s e-market-base demand. Our results suggest that under some conditions, both the manufacturer and the e-retailer can be better off from information sharing. Especially when the e-retailer’s market share is larger and the product’s e-market-base demand is higher, information sharing is more valuable for the supply chain players. Using our analysis findings, we indicate marketing strategies that the manufacturer and the e-retailer may want to adopt.

Date: 2008
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