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Information sharing and channel encroachment in biomass supply chains
1College of Mechanical and Electrical Engineering, Henan Agricultural University, Zhengzhou, Henan Province, China.
Plos One
|September 20, 2024
Summary
Information sharing in biomass supply chains is crucial for sustainability. When farmers encroach, sharing demand information with all upstream members boosts overall profits, but sharing only with middlemen maximizes power plant profits, potentially harming long-term stability.
Area of Science:
- Supply Chain Management
- Game Theory
- Biomass Energy
Background:
- Information asymmetry is a key challenge in biomass raw material supply chains.
- Sustainable development necessitates addressing this asymmetry between biomass power plants and upstream suppliers.
Purpose of the Study:
- To investigate optimal information sharing strategies for biomass power plants.
- To analyze the impact of farmer encroachment on biomass feedstock supply on these strategies.
Main Methods:
- Utilized a game theory model to analyze eight distinct information sharing scenarios.
- Examined the influence of channel encroachment and competition intensity on information sharing.
Main Results:
- When channel encroachment occurs, sharing demand information with all upstream players significantly increases total supply chain profits.
- Sharing information solely with middlemen maximizes the power plant's profit but may jeopardize long-term supply chain stability.
- Absence of encroachment can lead to reduced upstream profits if information is shared broadly.
- Low channel competition intensity favors transparent demand information for maximizing power plant returns.
Conclusions:
- Biomass power plants should tailor information sharing strategies based on the presence of farmer encroachment and channel competition.
- Strategic information sharing is vital for enhancing supply chain efficiency and profitability in the biomass sector.
- Careful consideration of the scope of information sharing is necessary, especially when farmers do not encroach on the supply chain.
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