A contest among distributors over who is a better newsvendor

This paper is concerned with the ex-post evaluation and rewarding of vendors who manage inventories of items they sell at different retailers, for their relative performance in forecasting demand. The specific scenario that motivated us has to do with a wholesaler who deploys distributors, each of whom manages the inventories of products at different stores (VMI), which have a revenue-sharing arrangement with the dairy. A distributor visits each of his stores periodically, removes the expired items and stocks the shelf with quantities of his choice. A good distributor in that sense is the one having few overages and few underages.