The effect of information precision and information reliability on manufacturer-retailer relationships.

Accounting Review,  July, 2002  by Susan Cohen Kulp

• E-mail
• Print
• Link

I. INTRODUCTION

This paper examines how both the extent to which a retail firm is willing to share internal accounting information with a manufacturer and the reliability of the information transmission from the retailer to the manufacturer affect the total supply-chain profits resulting from two alternative inventory management systems: a traditional system and a Vendor Managed Inventory (VMI) system. In a traditional system, manufacturers and retailers forecast demand independently; the retailer determines an order quantity and the manufacturer selects a production quantity. In contrast, a retailer using a VMI system delegates her inventory decisions to the manufacturer; the manufacturer determines ...