Inventory policies and information sharing in multi-echelon supply chains

The aim of this article is to show how to modify a replenishment rule in relation to the operational information shared by suppliers. More specifically, we present a model of an Automatic Pipeline Variable Inventory and Order-Based Production Control System rule for a multi-echelon supply chain characterised by different increasing levels of shared information. A numerical study is presented to underline the performance differences for three variants of the smoothing order rule in terms of bullwhip reduction, inventory stability and operational and customer responsiveness. Results show how the effectiveness of a smoothing replenishment rule depends on the level of information sharing.

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