Article ID: | iaor20041461 |
Country: | United States |
Volume: | 12 |
Issue: | 1 |
Start Page Number: | 1 |
End Page Number: | 11 |
Publication Date: | Mar 2003 |
Journal: | Production and Operations Management |
Authors: | Croson Rachel, Donohue Karen |
Keywords: | supply chain, point of sale |
We examine the impact of point of sale (POS) data sharing on ordering decisions in a multi-echelon supply chain. In particular, we focus on how exposure to POS data may help reduce the “bullwhip effect”, the tendency of orders to increase in variability as one moves up a supply chain. Theoretical studies have shown that exposure to POS data can lead to a reduction in the bullwhip effect when suppliers have no prior knowledge of the demand distribution. The benefit of sharing POS data in stable industries, where the demand distribution is commonly known, is less clear. We study this phenomenon from a behavioral perspective in the context of a simple, serial, supply chain subject to information lags and stochastic demand. We find, using a controlled simulation experiment, that sharing POS information