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Analysis of the Value of Yield Information under Periodic Review Inventory System  

Min, Dai-Ki (이화여자대학교 경영학과)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.36, no.3, 2011 , pp. 61-74 More about this Journal
Abstract
The objective of this study is to evaluate the effects of sharing uncertain yield information with a downstream supply chain player. We are interested in understanding how the amount of yield uncertainty affects the supply-side benefits and/or costs, which has not been considered in the literature, in addition to the customer-side benefits. With that purpose, this work evaluates a supplier who provides yield information in comparison with another supplier who shares no information. We simulate an order-up-to type heuristic policy that is adapted from the literature and reasonably modified to represent yield information sharing with error. From the simulation study, we argue that the customer would experience cost reduction, but the cost for supplier's inventory is increasing when sharing yield information. Furthermore, the amount of benefits and costs are situational and affected by level of yield uncertainty and demand variance. Based on the simulation study, we finally make several recommendations for the supply-side approaches to yield information sharing.
Keywords
Yield Uncertainty; Information Sharing; Information Error; Inventory Model;
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