Information Sharing in a Supply Chain With a Coopetitive Contract Manufacturer

This paper studies information sharing in a supply chain where a contract manufacturer (CM) acts as both an upstream partner and a downstream competitor to an original equipment manufacturer (OEM). To better explore the effect of information sharing on a coopetitive supply chain, we consider a sequential game with the OEM as the Stackelberg leader under two different wholesale pricing methods, which is close to the practical situation. Our analysis shows that when the wholesale price is exogenously given, information sharing is beneficial for the OEM but hurts the CM, and a side-payment contract is designed to induce Pareto-optimal information sharing. When the wholesale price is a decision variable, the CM benefits from information sharing while the OEM does not and a discount-based wholesale price contract is designed to induce truthful information sharing. The numerical examples analysis further finds that the OEM benefits from the exogenous wholesale price scenario while the CM benefits from the endogenous wholesale price scenario. The study sheds lights on the decision-making processes for operating and managing the coopetitive supply chain and extends the research scope of information sharing. Our findings also provide some scientific references about information sharing in daily production.