Information increment and information value of demand information in supply chains

The definition and measurement of information increment and information value of demand information in supply chains were given, basing on theory of information science. It showed how a certain piece of demand information took effect in the process of making a decision on order, and how the wholesaler's expected income varied with decision changing by establishing an order decision model. The relationship between information increment and information value was studied after analyzing information increment and information value when the actual demand was uniform distribution and normal distribution respectively. The results of equation calculation and simulation experiment prove that there is positive correlation between information increment and information value, and the information increment can influence the information user's income. The results of the research also prove that it is very necessary to establish an effective information evaluation system for members in supply chains to increase income by improving the quality of decision information.