Question

) Conduct research and provide and discuss two real business examples (i.e., real companies) on how information symmetry (or asymmetry) influenced inventorybased supply chain performance via incentive alignment (or incentive misalignment). Maximum 1 page

Answer 1

Imperfect and asymmetric information can impact inventory-based supply chain performance through incentive alignment or misalignment. Two real business examples include Walmart vs. a small neighborhood store and Amazon vs. traditional bookstores.

Step-by-step explanation:

Imperfect and asymmetric information can have a significant impact on inventory-based supply chain performance through incentive alignment or misalignment. To illustrate, let's consider two real business examples:

1. Example 1: Walmart vs. a small neighborhood store:
2. When it comes to inventory management, Walmart has access to a massive amount of data, technology, and resources. This enables them to have a higher level of information symmetry with their suppliers, resulting in better coordination and alignment of incentives. On the other hand, a small neighborhood store may have limited resources and data, leading to information asymmetry and potentially misaligned incentives.
3. Example 2: Amazon vs. traditional bookstores:
4. Amazon's extensive customer review system provides a high level of information symmetry between buyers and sellers, ensuring transparency and alignment of incentives. In contrast, traditional bookstores may rely more on sales associates' recommendations, leading to imperfect and asymmetric information. This could result in misaligned incentives between the store and the customer.

These examples demonstrate how information symmetry or asymmetry can influence inventory-based supply chain performance through incentive alignment or misalignment in real-life business scenarios.