This research studies the impact of improved forecasts on the members of a two-stage supply chain. The supplier builds capacity based on original forecast information, and the manufacturer places its order after observing improved (but imperfect) demand information. We study three types of...

Managers often engage in forecast updating with the expectation that forecast updating reduces expected shortage and inventory costs. One undesirable effect of forecast updating is that it may lead to the bullwhip effect, a phenomenon where the variability of demand increases as one moves up the...

In this paper, we consider a periodic review inventory problem where demand in each period is modeled by linear regression. We use a Bayesian formulation to update the regression parameters as new information becomes available. We find that a state-dependent base-stock policy is optimal and we...