The value of information sharing in a two-level supply chain

Many companies have embarked on initiatives that enable more demand informa tion sharing between retailers and their upstream suppliers. While the lite rature on such initiatives in the business press is proliferating, it is no t clear how one can quantify the benefits of these initiatives and how one can identify the drivers of the magnitudes of these benefits. Using analyti cal models, this paper aims at addressing these questions for a simple two- level supply chain with nonstationary end demands. Our analysis suggests th at the value of demand information sharing can be quite high, especially wh en demands are significantly correlated over time.