The Effect of Information Sharing on Supply Chain Cost and Bullwhip Effect

Information sharing has been seen as an effective way to improve the performance of supply chains. However, Information sharing may not always help to get the ideal improvement. This paper paid attention to the effect of information sharing on supply chains, how does the usage of shared customer demands information can affect the bullwhip effect and cost of supply chains is discussed. A model that using both the customer demand information and the orders received to forecast demands is introduced. Simulations are designed to calculate the bullwhip effect and the cost of the supply chain. It is pointed that when there only the customer demand information is shared, the cost of the supply may increase whilst the bullwhip effect is decreased.