A supply chain model of vendor managed inventory

A supply chain model of vendor managed inventory

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Article ID: iaor2003897
Country: United Kingdom
Volume: 38E
Issue: 2
Start Page Number: 75
End Page Number: 95
Publication Date: Apr 2002
Journal: Transportation Research. Part E, Logistics and Transportation Review
Authors: ,
Keywords: supply, economics
Abstract:

This research evaluates how vendor managed inventory (VMI) affects a supply channel. Specifically, VMI always leads to a higher buyer's profit, but supplier's profit varies. In the short-term, VMI is found to reduce total costs of the channel system, but under certain cost conditions between buyer and supplier, it could decrease the purchasing price and supplier's profit. In the long-run, it could more likely increase supplier's profit than in the short-run. Finally, VMI is an effective supply chain strategy that can realize many of the benefits obtainable only in a fully integrated supply chain.

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