| Collaboration between members of a supply chain has commonly been recognized as a strategy for increasing operational efficiency and reducing costs. In particular, sharing such information as sales information can significantly provide benefits to the supply chain management. These benefits stem from the reduction of uncertainty, allowing for better decision making. Due to the benefits of collaborating along the supply chain, many techniques for achieving collaboration have been proposed, such as Collaborative Planning and Forecasting Replenishment (CPFR). It is also common to share individual forecasts along the supply chain. In particular, many firms centralize customer's demand information making it available to every upstream member of the supply chain. In this paper we, propose to use a mixed integer programming model of a simplistic supply chain, where unobservable customer's demand is forecast using an exponential smoothing model. We compare the benefits of using centralized demand forecast by comparing the optimal costs of the decentralized model versus the costs of the centralized model and identify the differences in performance between the two models. The results further support the benefits of collaborative approach in supply chain management, reported by other authors.
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