Operating parameters for a single-vendor multiple-buyers Vendor Managed Inventory System with Outsourcing

This paper discusses the operating parameters of a Two echelon single-vendor-‘n’ buyers Vendor Managed Inventory System with Outsourcing (TVMISO). The operating parameters of the above model are the selling prices at the buyers market, and the contract prices between the vendor and the buyers. The selling prices depend on the sales quantities and determine the channel profit of the Supply Chain (SC). The contract prices depend on the partners understanding on their revenue sharing agreement. A mathematical model of the TVMISO problem is formulated to find the optimal sales quantities for maximum channel profit.