What is the Value of the Online Retailer's Demand Forecast Information Sharing?

Abstract

Online retailers consider history clicks when forecasting product market demand. Assuming that online retailers can forecast the market demand accurately, this study focuses on the supply chain composed of one online retailer and multiple suppliers When online retailer determining the order quantity, the quantity of maximum inventory is decide by the method of “current demand and safety stock” instead of “the average of historical demand and safety stock”,this study investigates the influence of the market demand information sharing of online retailer to the bullwhip effect on supply chain and the level of the supplier inventory. The results prove that the market demand information sharing of online retailer can reduce the bullwhip effect on supply chain, and can also reduce the inventory level of supplier. In addition continuous cycle demand correlation is the most significant impact that can influence the value of information sharing.