NDLI: Vendor-managed inventory and the effect of channel power

Content Provider	Springer Nature Link
Author	Bichescu, Bogdan C. Fry, Michael J.
Copyright Year	2007
Abstract	We analyze decentralized supply chains that follow general continuous review (Q, R) inventory policies subject to vendor-managed inventory agreements where the supplier chooses the order quantity Q, and the retailer chooses the reorder point R. Within the VMI scenario, we explore the effect of divisions of channel power on supply chain and individual agent performance by examining different game theoretic models. Optimal policies and analytical results, including existence and uniqueness proofs for equilibrium solutions under VMI, are derived. Numerical results are provided to compare the effectiveness of VMI and to analyze different channel power relationships under a variety of environmental conditions. We find that VMI can result in considerable supply chain savings over traditional relationships and that the relative division of channel power can significantly effect the performance of VMI. Interestingly, we find that the greatest system benefits from VMI arise in asymmetric channel power relationships, but that individual agents lack the incentive to assume a leadership role.
Starting Page	195
Ending Page	228
Page Count	34
File Format	PDF
ISSN	01716468
Journal	OR Spectrum
Volume Number	31
Issue Number	1
e-ISSN	14366304
Language	English
Publisher	Springer-Verlag
Publisher Date	2007-09-29
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Inventory Game theory Vendor-managed inventory Channel power Business/Management Science Calculus of Variations and Optimal Control; Optimization Operations Research/Decision Theory
Content Type	Text
Resource Type	Article
Subject	Management Science and Operations Research Business, Management and Accounting

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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