A Comparison Study on Retailer-managed and Vendor-managed Inventory Policies in the Retail Supply Chain

소매점 공급사슬에서 소매점주도와 공급자주도 재고정책에 대한 비교 연구

  • Hong, Sung-Chul (Department of Industrial Engineering, College of Advanced Technology, Kyung Hee University) ;
  • Park, Yang-Byung (Department of Industrial Engineering, College of Advanced Technology, Kyung Hee University)
  • 홍성철 (경희대학교 테크노공학대학 산업공학과) ;
  • 박양병 (경희대학교 테크노공학대학 산업공학과)
  • Published : 2006.12.31

Abstract

Vendor-managed inventory policy(VMIP) is a supply-chain initiative where the supplier is authorized to manage inventories of items at retail locations. In VMIP, the supplier monitors sales and stock information at retail locations and makes decisions of inventory replenishment and transportation simultaneously. VMIP has been known as an effective supply chain strategy that can realize many of benefits obtainable only in a fully integrated supply chain. However, VMIP does not always lead to lower the supply chain cost. It sometimes generates the total supply chain cost higher than the traditional retailer-managed inventory policy (RMIP). In this paper, we perform a comparison study on RMIP and VMIP in the retail supply chain which consists of a single supplier and a number of retailers. We formulate mixed integer programming models for both RMIP and VMIP with vehicle routing problems and perform computational experiments on various test problems. Furthermore, we derive the conditions which guarantee the dominant position for VMIP with respect to total supply chain cost in the simple retail supply chain.

Keywords

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