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niValue of Information in Capacitated Supply Chains

Author(s): Srinagesh Gavirneni, Roman Kapuscinski and Sridhar Tayur

Reviewed work(s):

Source: Management Science, Vol. 45, No. 1 (Jan., 1999), pp. 16-24

Published by: INFORMS

Stable URL: http://www.jstor.org/stable/2634919 .

Accessed: 05/06/2012 05:54

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Value

of

Information in

Supply

Capacitated

Chains

Srinagesh Gavirneni * Roman Kapuscinski * Sridhar Tayur

Austin ProductCenter-Research, chlumberger,ustin, Texas78726

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University f MichiganBusinessSchool, nn Arbor,Michigan48109

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Graduate choolof Industrial dministration, arnegie ellon University, ittsburgh, ennsylvania 5213

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WATeincorporate information flow between a supplier and a retailer in a two-echelon

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model that captures the capacitated setting of a typical supply chain. We consider three

situations: (1) a traditional model where there is no information to the supplier prior to a

demand to him except for past data; (2) the supplier knows the (s, S) policy used by the

retailer as well as the end-item demand distribution; and (3) the supplier has full information

about the state of the retailer. Order up-to policies continue to be optimal for models with

information flow for the finite horizon, the infinite horizon discounted and the infinite horizon

average cost...