Vendor managed inventory with fixed shipping cost allocation

Son, J. Y., & Ghosh, S. (2019). Vendor managed inventory with fixed shipping cost allocation. doi:https://doi.org/10.1080/13675567.2019.1568974
Title

Vendor managed inventory with fixed shipping cost allocation

Author(s) or Creator(s)
Son, Joong Y.
Ghosh, Subhadip
Date

2019

Peer Reviewed?

Yes

Keywords

vendor-managed inventory
VMI
locally-managed inventory
LMI
collaborative replenishment
incentives

Description

This paper examines the effectiveness of a vendor-managed inventory (VMI) system in a decentralised supply chain. Specifically, a two-tier supply chain with one vendor and multiple buyers is analysed under two replenishment models – an LMI system and a VMI system with vendor coordination that includes retailer incentives and cross-docking at the vendor. The impact of supply chain design parameters (number of retailers and retailer heterogeneity), and a policy parameter (shipment frequency) on the effectiveness of the VMI system is studied. Using an analytical model as well as numerical experiments, we find that incentive-aligned contractual arrangements can be made between the vendor and the retailers through reallocation of fixed shipping cost savings arising from VMI.

Publication Information

Joong Y. Son & Subhadip Ghosh (2019) Vendor managed inventory with fixed shipping cost allocation, International Journal of Logistics Research and Applications (Impact factor 2.828).

DOI

https://doi.org/10.1080/13675567.2019.1568974

Type of Item

Journal Articles

Language

English

MacEwan Users Only

https://library.macewan.ca/cgi-bin/SFX/url.pl/BOH

Rights

All Rights Reserved