Demand Information Sharing Impact on Supply Chain Management under Demand Uncertainty. A Simulation Model

The modern business environments are subject to uncertainties that can adversely influence the supply chain performance. Demand information sharing between supply chain entities can improve the supply chain performance. To encourage them to share information, the generated benefits need to be comprehensively recognized. Simulation allows doing so. This paper intends to quantify the impact of the demand information sharing on supply chain management under demand uncertainty. The performance measure used is total costs. A simulation model of the supply chain of a case study was developed in Arena software. Customer demand is modeled by a normal distribution. Four scenarios are simulated with two different standard deviations each one with and without demand information sharing between supply chain entities. The results analysis shows that an increase in the customer demand variability worsens the studied performance measure. However, the introduction of demand information sharing improves the supply chain performance measure.