To Be or Not to Be? Big Data Business Investment Decision-Making in the Supply Chain

Abstract

The development of Big Data technology initiates an emerging research question of whether and how to invest in Big Data business for supply chain members to establish sustainable competitive edge. The aim of our study was to assess investment in Big Data business and its sustainable effects on supply chain coordination. We considered a two-stage supply chain with one supplier and one retailer who may or may not invest in Big Data business. Five decision-making modes were proposed based on the investment portfolios. The impacts of Big Data business on the profit of the supply chain and its members were analyzed and it was confirmed that a coordination scheme could achieve supply chain coordination. The results indicated that when the Big Data cost met a certain threshold, the profit of the supply chain and its members would increase whether supply chain members choose to invest in Big Data business individually or jointly. A reasonable cost allocation of Big Data business between supply chain members was provided when both members invest in Big Data. In addition, after the members invested jointly, a revenue-sharing contract could be applied to perfectly coordinate the supply chain.