Improving Suppliers Performance Using Common Replenishment Epochs in a Vendor-Managed Inventory System
This paper studies a single-product supply chain, in which the supplier needs to manage its own inventory to fulfill requests from a set of heterogonous retailers. The retailers requests are determined by the supplier in a fashion of vendor-managed inventory (VMI). Under a VMI arrangement, the supplier agrees to pay all the order setup costs and a portion of unit holding costs for the retailers. The objective of the system is to minimize the total relevant cost of the supplier. This paper compares the suppliers performance under the VMI strategy and an uncooperative supply chain in which the retailers decide replenishment requests based on their order setup and holding costs. To further improve the suppliers performance, a VMI/CRE strategy, which applies the strategy of common replenishment epochs (CRE) under the VMI system, is utilized to save the order processing costs of the supplier. However, the supplier is required to provide a price discount to compensate retailers loss for fitting ordering schedules with CRE scheme. Computational experiments are conducted and the performances of the VMI and VMI/CRE strategies are quite satisfied.
supply chain vendor-managed inventory common replenishment epochs
Juhwen Hwang Su-Hwa Wu Yu-Yen Huang
Department of Business Administration, National Dong Hwa University, Hualien 97401, Taiwan Department of Food and Beverage Management, Taiwan Hospitality & Tourism College, Hualien 97448, Tai Graduate Institute of Global Operations Strategy and Logistics Management, National Dong Hwa Univers
国际会议
The Seventh International Symposium(ISORA08)(第七届国际效力研究及其应用学术会议)
云南丽江
英文
199-206
2008-10-31（万方平台首次上网日期，不代表论文的发表时间）