Decentralized supply chains subject to information delays
Management Science
Performance-Based Incentives in a Dynamic Principal-Agent Model
Manufacturing & Service Operations Management
Manufacturing & Service Operations Management
Analysis of a Forecasting-Production-Inventory System with Stationary Demand
Management Science
The Effect of Collaborative Forecasting on Supply Chain Performance
Management Science
Integrating Replenishment Decisions with Advance Demand Information
Management Science
The Value of Information Sharing in a Two-Level Supply Chain
Management Science
Measuring Imputed Cost in the Semiconductor Equipment Supply Chain
Management Science
Contracting and Information Sharing Under Supply Chain Competition
Management Science
Promised Lead-Time Contracts Under Asymmetric Information
Operations Research
Strategic Safety Stocks in Supply Chains with Evolving Forecasts
Manufacturing & Service Operations Management
Does a Manufacturer Benefit from Selling to a Better-Forecasting Retailer?
Management Science
Competition and Cooperation in a Two-Stage Supply Chain with Demand Forecasts
Operations Research
Trust in Forecast Information Sharing
Management Science
The Value of Collaborative Forecasting in Supply Chains
Manufacturing & Service Operations Management
On the Equilibrium Behavior of a Supply Chain Market for Capacity
Manufacturing & Service Operations Management
A Multiordering Newsvendor Model with Dynamic Forecast Evolution
Manufacturing & Service Operations Management
Revenue Sharing and Information Leakage in a Supply Chain
Management Science
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This paper investigates the role of time in forecast information sharing and decision making under uncertainty. To do so, we provide a general framework to model the evolutions of forecasts generated by multiple decision makers who forecast demand for the same product. We also model the evolutions of forecasts when decision makers have asymmetric demand information and refer to it as the Martingale Model of Asymmetric Forecast Evolutions. This model helps us study mechanism design problems in a dynamic environment. In particular, we consider a supplier's principal's problem of eliciting credible forecast information from a manufacturer agent when both firms obtain asymmetric demand information for the end product over multiple periods. The supplier uses demand information to better plan for a capacity investment decision. When the supplier postpones building capacity and screening the manufacturer's private information, the supplier and the manufacturer can obtain more information and update their forecasts. This delay, however, may increase respectively, decrease the degree of information asymmetry between the two firms, resulting in a higher respectively, lower cost of screening. The capacity building cost may also increase because of a tighter deadline for building capacity. Considering all such trade-offs, the supplier has to determine i when to stop obtaining new demand information and build capacity, ii whether to offer a screening contract to credibly elicit private forecast information or to determine the capacity level without information sharing, iii how much capacity to build, and iv how to design the overall mechanism so that both firms benefit from this mechanism. This paper provides an answer to these questions. In doing so, we develop a new solution approach for a class of dynamic mechanism design problems. In addition, this paper provides a framework to quantify the option value of time for a strategic investment decision under the dynamic evolutions of asymmetric forecasts. This paper was accepted by Yossi Aviv, operations management.