Heuristic Simulation–Optimization Approach to Information Sharing in Supply Chains: A Descriptive Study

Abstract

The supply chain's sustainability is only conceivable if the profitability of all levels involved in the supply chain is ensured. If information sharing and an effective and seamless coordination system are accomplished between the layers, each of these tiers will be profitable. The bullwhip effect, a significant risk factor, is reduced as a result of this technique. The most ideal supply chain is the symmetric chain in which the product quantity, equal to the order quantity of the tier, is transferred from the upstream tier to the downstream tier. The study objective is to determine the necessary information sharing level to optimize the supply chain that has asymmetric flows of input and output values and to examine the effects of information sharing on the order fill rate (OFR) and total inventory cost (TIC) of the supply chain through analysis of variance (ANOVA) testing. Particle swarm optimization (PSO) was used to optimise the supply chain, with an objective function that assumed maximum of OFR and minimization of TIC. When comparing the mean, variance, and coefficient of variation, the proposed method produced outstanding results. In addition, to verify the influence of the information sharing level, the strategy performed an ANOVA test with a 5% significance threshold.