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Unformatted text preview: who uses such
information to develop her production plan. However, as the buyer can influence the
supplier inventory decision by manipulating his forecasts, a potential incentive problem
lurks behind the QF contract. That is, the buyer has an incentive to induce the supplier to
carry a high inventory (at her expense) by overstating the demand. In expectation of this
strategic behavior, the supplier may not take the forecasts seriously. Thus, information
sharing will not take place as an equilibrium. To overcome this problem, the QF contract
is structured so that the buyer is allowed to make limited changes to the forecast
quantities for future periods, and hence the term quantity flexible.
2.5. Production/Delivery Schedule
8 A manufacturer could make use of its supplier production or delivery schedule
to improve its own production schedule. For example, US auto companies have access to
the production schedule for their orders at steel suppliers. A Taiwanese semiconductor
manufacturer allows her global customers access to her production schedule. UPS
receives delivery requirements information downloaded from MicroAge every two hours.
SEJ trucking companies receive delivery requirements multiple times a day as an
advance notice for efficient scheduling of his fleet. Thus, information about input/job
availability helps a buyer expand the planning horizon of his own production schedule.
Also he can quote more accurate due dates to his customers.
Similarly, production schedules at a manufacturing site can be useful inputs to the
supplier in ensuring reliable resupply. Motorola, for example, has used a program called
Scheduling Sharing, whereby computer and peripherals manufacturers that are the
customers of Motorola chip division would share their production schedules with
Motorola. This enables Motorola to develop its own production plan, as well as to use
the most cost-effective means to replenish the customers stockpiles so that their
production schedule would not be disrupted by not having adequate chips.
2.6. Other Information Sharing
Other examples of informati...
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- Fall '08
- Industrial Engineering