Coordination in a multiple producers–distributor supply chain and the value of information

• Published in: International journal of production economics Vol. 167; pp. 63 - 73
• Main Authors: Thomas, Anu, Krishnamoorthy, Mohan, Singh, Gaurav, Venkateswaran, Jayendran
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.09.2015; Elsevier Sequoia S.A
• Subjects: Coordinated scheduling; Coordination; Decentralised decision-making; Decentralised supply chain; Decentralization; Information sharing; Lagrangian relaxation; Production capacity; Studies; Supply chains; Value of information; Decentralised decision-making; Decentralised supply chain; Value of information; Lagrangian relaxation; Coordinated scheduling
• ISSN: 0925-5273; 1873-7579
• DOI: 10.1016/j.ijpe.2015.05.020

This paper analyses coordination and the value of information in a decentralised multiple-producers–distributor supply chain. The impact of sharing two vital pieces of information of this supply chain-(i) production capacity and (ii) resource constraints – is examined with an example from a coal supply chain. The different components of decentralised supply chain coordination are identified. The ‘value of information’ is computed using a decentralised approach which is developed based on an iterative Lagrangian relaxation algorithm. Results and analysis based on extensive computational experiments with different models which have different levels of information-sharing are presented. As the results show, information-sharing significantly contributes to the strengthening of coordination in a decentralised supply chain. The resource constraint information is found to have higher impact than the production capacity information. The paper concludes with a few ideas to extend and generalise this work.