Supply chain model in vendor managed inventory

Supply chain model in vendor managed inventory

This paper develops an analytical model that explores how important supply chain parameters affect the cost savings to be realized from collaborative initiatives such as vendor-managed inventory (VMI). Results from the model show that the optimal replenishment frequency with VMI is greater than that...

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Bibliographic Details
Published in:2008 IEEE International Conference on Service Operations and Logistics, and Informatics Vol. 2; pp. 2110 - 2113
Main Authors: Chuantao Wang, Shouwen Ji, Jinsheng Shen, Wei, Wei
Format: Conference Proceeding
Language:English
Published: IEEE 01-10-2008
Subjects:
replenishment policy
supply chain
vendor managed inventory
Online Access:Get full text
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Summary:This paper develops an analytical model that explores how important supply chain parameters affect the cost savings to be realized from collaborative initiatives such as vendor-managed inventory (VMI). Results from the model show that the optimal replenishment frequency with VMI is greater than that without VMI, but the optimal shortage quantity and the optimal order quantity for buyer with VMI is smaller than those for buyer without VMI. Results also show that under a certain condition, the total inventory cost with VMI is lower than that without VMI and these benefits are disproportionally distributed between buyers and suppliers.
ISBN:1424420121
9781424420124
DOI:10.1109/SOLI.2008.4682882