Information revelation mechanism of supply chain under dual-dimensional asymmetric information

A supply chain consisted of a supplier and a manufacturer was researched, in which the demand and cost information of manufacturer were private with high and low type. To reveal the manufacturer's true demand and cost information, the principal-agent was adopted to study the supplier's optimal price contract. The results showed that a two-part tariff contract was able to reveal the manufacturer's true information while maximizing the supplier's profit. Moreover, the two-part tariff contract changed with the ratio of the demand information variance to the manufacturer's cost information variance. When the manufacturer had the same type of cost and demand information, the supplier could determine the wholesale price depending on the sum of two kinds of information. The lowest wholesale price was offered to the low-demand low-cost manufacturers, and the highest wholesale price was offered to the high-demand high-cost manufacturers. When the manufacturer had different types of cost and demand information, the supplier could not determine its wholesale price considering only the sum of two kinds of information. A higher wholesale price was offered to the low-demand high-cost manufacturer than that offered to the high-demand low-cost manufacturer. The influence of asymmetric information of demand and cost on supplier's profit was analyzed through the numerical experiment, and the result showed that the supplier's profit decreased in the cost information variance but increased in the demand information variance. © 2019, Editorial Department of CIMS. All right reserved.