Value of Advance Demand Information in Production and Inventory Systems with Shared Resources

Advance Demand Information can improve the performance of production/inventory systems with random demand considerably. However, to exploit the potential of such information, replenishment policies must be adapted to the available information. We explore the impact and the benefits of Advance Demand Information under optimal replenishment policies for two different supply chain structures, one without inventory sharing and the other with complete inventory and capacity sharing. We perform this analysis for three different modeling frameworks with different degrees of sophistication in modeling the inventory and production dynamics. This enables a comparison of the factors that make advance demand information relatively more valuable.