Impact of quality decisions on information sharing with supplier encroachment

Abstract

This study examines a retailer's decision to share market demand information in a supply chain wherein a supplier sells a product with a certain level of quality to a retailer, who then resells it to the end consumer. It also considers whether a supplier should establish a direct selling channel by incurring a fixed entry cost to compete with the retail channel. Although conventional wisdom indicates that a retailer may voluntarily disclose information under ex-ante supplier encroachment, our results show how and why a retailer may share information with the supplier who encroaches on the retail market with a decision on quality. Specifically, our findings reveal that information sharing is beneficial to the retailer when the quality cost coefficient is low and entry cost is relatively low, even under encroachment by the supplier. Moreover, the retailer may prefer to disclose demand information to the supplier if the quality cost coefficient is low, even when the entry cost is high, under non-encroachment. Interestingly, we found that the supplier prefers to encroach if the retailer shares demand information when the entry cost is moderate. Further, we found that the retailer has a higher incentive to share information under supplier encroachment compared with non-encroachment. These results are in sharp contrast with the extant literature.

Impact of Capital Position and Financing Strategies on Encroachment in Supply Chain Dynamics

“…This does not mean the supplier must sell products only through the direct sales channel if it is profitable. The ex-ante consideration of supplier encroachment is frequently used in the previous literature [14,15] because establishing a physical or online store requires investment. Second, the supplier offers a wholesale price contract to the retailer, building upon the encroachment behavior.…”

“…First, the supplier determines the wholesale price and makes an encroaching decision with commitment. The policy is established in advance to allow the supplier to prepare for setting up the new direct sales channel [14][15][16]. This includes establishing company-owned franchises, outlets, and online websites, as well as recruiting and training a sales force.…”

Research and Development of Digital Work Ticket Information Sharing System Based on Mathematical Differential Improved Vector Space Model

“…The work ticket management process in PMS2.0 system includes: (1) Invoice issuing: The inspection team needs to issue, issue and permit by the WEB terminal when carrying out work, then print the paper work ticket and bring it to the job site; (2) Work ticket execution: Work ticket execution information is filled in the paper ticket on site; (3) End of work and end of work ticket: After the end of work, finally, the operation and maintenance personnel will fill in the license information, operation information, time information and other information related to the execution and termination of the work ticket on the WEB end and fill in the PMS2.0 system [5] . The WEB terminal management of work tickets can not meet the actual needs of on-site work carried out by inspection team members, thus increasing the workload of grassroots staff, it cannot meet the requirements of the management for secure online sharing [6] .…”