On the value of sharing demand information in supply chains

Many companies are embarking on strategies to share consumer sales data among supply chain members. In most cases, this requires huge investments in information systems and training. Benefits from sharing information have been discussed extensively in the supply chain literature. However, a steady stream of research papers on Downstream Demand Inference (DDI) suggest that the upstream member can mathematically infer the demand at the downstream member. They claim that there is no value in sharing demand information. Subsequent papers scrutinise the model assumptions in this stream of research and show the conditions under which the consumer demand can and cannot be inferred mathematically by the upstream member. Hence, the review of this literature clarifies when information sharing is and is not valuable. In the DDI literature, the evaluation of the conditions under which information sharing is valuable can help companies make more informed decisions on such investments. Under other conditions, where information sharing is not feasible because of such issues as trust and confidentiality, DDI can prove valuable.