Analysis of Information-Sharing Mechanisms in Online Closed-Loop Supply Chain Systems

This research analyzes optimal information-sharing (IS) mechanisms in online closed-loop supply chain (CLSC) systems. In contrast to offline supply chains, online retailers hold a significant informational edge over their upstream counterparts due to their access to both demand and return information. Given that information asymmetry severely diminishes the efficiency of online CLSCs, it is imperative to optimize IS mechanisms to enhance operational performance. We emphasize the impact of product return and replacement information in e-businesses on inventory costs and bullwhip effects. The present study systematically characterizes four distinct IS mechanisms to assess their efficacy in mitigating information variability and inventory costs. The results underscore the vital importance of return information for supply chain management practices. A distributor who fails to account for return dynamics in their e-business may experience a detrimental operational performance. Particularly, online supply chains exhibit distinctive anomalies: sharing demand information may unexpectedly amplify bullwhip effects if the return period surpasses an online retailer’s lead time. This study offers valuable perspectives to assist managers in identifying the most effective IS strategies based on particular supply chain contexts, thereby facilitating robust supply chain partnerships.