Information distortion in a supply chain: the bullwhip effect
Management Science - Special issue on frontier research in manufacturing and logistics
Quick response in manufacturer-retailer channels
Management Science - Special issue on frontier research in manufacturing and logistics
The Quantity Flexibility Contract and Supplier-Customer Incentives
Management Science
Coordination and Flexibility in Supply Contracts with Options
Manufacturing & Service Operations Management
Analysis of a Forecasting-Production-Inventory System with Stationary Demand
Management Science
A Supplier's Optimal Quantity Discount Policy Under Asymmetric Information
Management Science
A Time-Series Framework for Supply-Chain Inventory Management
Operations Research
Capacity Investments in Supply Chains: Sharing the Gain Rather Than Sharing the Pain
Manufacturing & Service Operations Management
Measuring Imputed Cost in the Semiconductor Equipment Supply Chain
Management Science
The Benefits of Advance Booking Discount Programs: Model and Analysis
Management Science
Simple Relational Contracts to Motivate Capacity Investment: Price Only vs. Price and Quantity
Manufacturing & Service Operations Management
Proceedings of the 40th Conference on Winter Simulation
Does a Manufacturer Benefit from Selling to a Better-Forecasting Retailer?
Management Science
Citation lag analysis in supply chain research
Scientometrics
Trust in Forecast Information Sharing
Management Science
The Newsvendor Problem with Advertising Revenue
Manufacturing & Service Operations Management
TECHNICAL NOTE---Decentralized Inventory Sharing with Asymmetric Information
Operations Research
The Value of Collaborative Forecasting in Supply Chains
Manufacturing & Service Operations Management
Capacity Planning in the Semiconductor Industry: Dual-Mode Procurement with Options
Manufacturing & Service Operations Management
Supply-Side Story: Risks, Guarantees, Competition, and Information Asymmetry
Management Science
Revenue Sharing and Information Leakage in a Supply Chain
Management Science
Advance Selling in a Supply Chain Under Uncertain Supply and Demand
Manufacturing & Service Operations Management
Manufacturing & Service Operations Management
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We study the important problem of how to assure credible forecast information sharing between a supplier and a manufacturer. The supplier is responsible for acquiring the necessary capacity before receiving an order from the manufacturer who possesses private forecast information for her end product. We address how different contracts affect the supplier's capacity decision and, hence, the profitability of the supplier and the manufacturer. We fully develop two contracts (and provide explicit formulae) to enable credible forecast information sharing. The first is a nonlinear capacity reservation contract under which the manufacturer agrees to pay a fee to reserve capacity. The second is an advance purchase contract under which the manufacturer is induced to place a firm order before the supplier secures the component capacity used to build the end product. These contracts serve a strategic role in information sharing. The capacity reservation contract enables the supplier to detect the manufacturer's private forecast information, while the advance purchase contract enables the manufacturer to signal her forecast information. We show that channel coordination is possible even under asymmetric forecast information by combining the advance purchase contract with an appropriate payback agreement. Through our structural and numerical results we also show that the degree of forecast information asymmetry and the risk-adjusted profit margin are two important drivers that determine supply chain efficiency and which contract to adopt.