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Value of Information Sharing in Online Retail Supply Chain Considering Product Loss

This article investigates the impact of information sharing on supply chain performance when considering the product loss in e-commerce. By characterizing four information sharing mechanisms, we analyze the optimal information sharing decisions on bullwhip effects and inventory costs in near/far-distance e-commerce contexts. The analytical results reveal the vital significance of product loss information to bullwhip and cost reductions. Particularly, in far-distance e-commerce, if the online retailer only shares the demand information, the wholesaler may suffer an even worse bullwhip effect than that without information sharing. Moreover, the impacts of product loss reveal the supply chain characteristic difference between fragile products and ordinary products in e-commerce. Our research generates important managerial insights regarding supply chain management and provides practical guidelines for online retailers and wholesalers optimizing their information sharing decisions according to different e-commerce contexts.