Management Review ›› 2021, Vol. 33 ›› Issue (4): 295-305.

• Logistics and Supply Chain Management • Previous Articles     Next Articles

Demand Information Sharing in Dual-channel Supply Chain with Remanufacturing

Shi Chunlai1, Li Jinjun2, Shu Xike3   

  1. 1. School of Economics and Management, Xidian University, Xi'an 710126;
    2. School of Economics and Management, Sichuan Tourism College, Chengdu 610100;
    3. School of Economics and Management, Southwest Jiaotong University, Chengdu 610031
  • Received:2018-03-12 Online:2021-04-28 Published:2021-05-06

Abstract: With the advance of information technology, retailers can predict accurately the demand information about the goods through rich market data. Major retailers such as Marks & Spencer’s, Wal-Mart Stores, Von’s Supermarket and so on are investing much to develop data system, and analyze these data to better predict the product demand. The data are viewed as the new oil. If the retailer shares her demand information, not only does the manufacturer mitigate the bullwhip problem and improve the collaboration with the retailer, but also she can build a better relationship with her partner. To our regret, not all of retailers share their demand information with manufacturers for free. According to Keifer’s investigation including 16 retailers from 11 countries in 2007, just 40% of the retailers share POS (point-of-sales) data with manufacturers. Even worse, over 40% of retailers who share POS (point-of-sales) data charge their manufactures for the data. Unluckily, Forrester gets the similar results from a broader study on 89 retailers in 2006. Based on the phenomenon above, many researchers explore whether the retailer has an incentive to share her demand information with manufacturer for free in single-channel/ dual-channel supply chain. Scholars like Ha et al. (2008, 2011) and Mao (2018) confirm the retailer is impossible to share her demand information without fee due to double marginalization problem.
However, these traditional wisdoms ignore the facts that the more and more manufacturers not only develop the direct channel, but also engage in remanufacturing, such as HP, Nike and so on. Motived by the observations of the current practice and literature, it is necessary we study whether the retailer has an incentive to share her demand information in dual-channel supply chain with remanufacturing.
We firstly develop the models without remanufacturing as benchmarks in dual-channel supply chain. Then we explore whether the retailer has an incentive to share her demand information in dual-channel supply chain with remanufacturing. Without loss of generality, the manufacturer is still the leader, and the retailer is the follower in the Stackelberg game. We obtain the equilibrium outcomes by the backward induction. The manufacturers always benefit from the demand information gotten from the retailer. Consisting with the traditional wisdoms, the retailer is not motive to share her demand information with the manufacturer who does not engage in remanufacturing for free. To our surprise, the retailer maybe share her demand information with the manufacturerin dual-channel supply chain with remanufacturing. The decision of retailer sharing her demand information with the manufacturer whether or not depends on the efficiency in collecting. When the manufacturer engages in remanufacturing effectively, the retailer shares demand information with the manufacturer. The reason why the retailer makes sharing is that high efficiency in collecting weakens double marginalization problem. Otherwise, the retailer never share her demand information for free. In addition, we design a mechanism of information sharing in which the retailer is paid by the manufacturer to share her demand information.

Key words: dual-channel supply chain, demand information, remanufacturing, efficiency in collecting