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Impact of Information Exchange on Supplier Forecasting Performance

Trapero Arenas, Juan and Kourentzes, Nikolaos and Fildes, Robert (2012) Impact of Information Exchange on Supplier Forecasting Performance. OMEGA the International Journal of Management Science, 40 (6). pp. 738-747. ISSN 0305-0483

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    Abstract

    Forecasts of demand are crucial to drive supply chains and enterprise resource planning systems. Usually, well-known univariate methods that work automatically such as exponential smoothing are employed to accomplish such forecasts. The traditional Supply Chain relies on a decentralized system where each member feeds its own Forecasting Support System (FSS) with incoming orders from direct customers. Nevertheless, other collaboration schemes are also possible, for instance, the InformationExchange framework allows demand information to be shared between the supplier and the retailer. Current theoretical models have shown the limited circumstances where retailer information is valuable to the supplier. However, there has been very little empirical work carried out. Considering a serially linked two-level supply chain, this work assesses the role of sharing market sales information obtained by the retailer on the supplierforecasting accuracy. Weekly data from a manufacturer and a major UK grocery retailer have been analyzed to show the circumstances where information sharing leads to improved forecasting accuracy. Without resorting to unrealistic assumptions, we find significant evidence of benefits through information sharing with substantial improvements in forecast accuracy.

    Item Type: Article
    Journal or Publication Title: OMEGA the International Journal of Management Science
    Additional Information: The final, definitive version of this article has been published in the Journal, OMEGA 40 (6), 2012, © ELSEVIER.
    Uncontrolled Keywords: Bullwhip effect ; Supply chain ; Supply chain collaboration ; Forecasting ; Neural networks
    Subjects: H Social Sciences > HB Economic Theory
    Departments: Lancaster University Management School > Management Science
    ID Code: 56130
    Deposited By: ep_importer_pure
    Deposited On: 13 Jul 2012 14:06
    Refereed?: Yes
    Published?: Published
    Last Modified: 05 Feb 2014 14:17
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/56130

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