Retailer policy, uncertainty reduction, and supply chain performance

Jin Kyung Kwak, Srinagesh Gavirneni

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


We investigate how the retailer's inventory policy affects the total cost of a serial supply chain. When the retailer uses the locally optimal (s,S) policy, there is randomness in order time and order quantity to the supplier whereas the supplier sees randomness only in order quantity for the suboptimal (R,T) policy and only in order time for another suboptimal (Q,r) policy. Using an extensive computational study, we find that the suboptimal policies perform better from the total supply chain perspective. The benefit of policy changes is magnified when the retailer costs are low, when the supplier costs are high, and when there is information sharing.

Original languageEnglish
Pages (from-to)271-278
Number of pages8
JournalInternational Journal of Production Economics
Issue number2
StatePublished - Aug 2011


  • Information sharing
  • Inventory policy
  • Supply chain management
  • Uncertainty reduction


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