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The impact of retailer's demand information sharing strategies on manufacturer encroachment

A two-echelon supply chain comprising a single retailer and a single manufacturer is investigated. The retailer may adopt different demand information sharing strategies. Likewise, the manufacturer may decide to encroach, or not encroach, on the retailer's space. The impact of such different decisions on the expected profits and strategies of both sides is discussed. The results reveal that: (1) Sharing or hiding demand information can lead to manufacturer encroachment; (2) Under each retailer's demand information sharing strategy, there are encroachment areas where Pareto improvement can be achieved; (3) Information sharing may not always benefit the manufacturer, and information hiding may not always be detrimental to the manufacturer. The effects of demand correction values and promotion fees on the strategies of both sides of the supply chain are further discussed in conjunction with numerical simulations.