Information‐sharing and coordination in a make‐to‐stock supply chain

Abstract Make‐to‐stock (MTS) production increases stockout risks. This study examines information sharing in a supply chain consisting of an MTS manufacturer and a retailer and proposes a cost‐sharing mechanism to facilitate information coordination. We model the interaction as a two‐stage game: a strategic stage in which the retailer decides whether to acquire and share demand information, and an operational stage in which the manufacturer sets the wholesale price and production quantity, followed by the retailer's retail price decision. Four information scenarios, reflecting different levels of information availability, are analyzed. Our results show that in the MTS context, the retailer prefers not only to withhold demand information but also to conceal the information asymmetry. Information sharing can be achieved through the cost‐sharing mechanism: if demand uncertainty exceeds a critical threshold, the manufacturer can subsidize the retailer's cost of acquiring and sharing information for its access.