Optimizing vendor-managed inventory systems with limited storage capacity and partial backordering under stochastic demand

2020 ◽  
Vol 54 (1) ◽  
pp. 179-209
Author(s):  
Ata Allah Taleizadeh ◽  
Iman Shokr ◽  
Fariborz Joali
Keyword(s):  
Supply Chain ◽  
Storage Capacity ◽  
Inventory Systems ◽  
Periodic Review ◽  
Vendor Managed Inventory ◽  
Continuous Review ◽  
Decision Variables ◽  
Partial Backordering ◽  
Key Factor ◽  
Optimal Values

A supply chain member’s coordination is a challenging issue and a key factor of success in business markets. In vendor-managed inventory systems, the vendor makes replenishment decisions at the site of buyer by which the supply chain can be coordinated more efficiently. Two integrated vendor managed inventory systems under continuous review and periodic review replenishment policies are developed considering partial backordering and limited storage capacity at the buyer’s side. Furthermore, traditional retailer managed inventory systems under the same settings are developed to compare against the integrated systems. Efficient algorithms are presented to derive the optimal values of decision variables. Finally, numerical experiments and comprehensive sensitivity analysis are used to show the applicability and efficiency of the proposed VMI systems.

Information Technology Enabled Vendor Managed Inventory in Modelling Supply Chain Issues

2010 ◽  
pp. 226-252 ◽  
Author(s):  
Subramanian Nachiappan ◽  
Natarajan Jawahar
Keyword(s):  
Information Technology ◽  
Supply Chain ◽  
Business Processes ◽  
Theoretical Background ◽  
Inventory Systems ◽  
Successful Implementation ◽  
Vendor Managed Inventory ◽  
Cooperative Agreements ◽  
Communication And Coordination ◽  
Operational Issues

Supply chain is a network of firms interacting in a linear fashion to produce, sell and deliver a product or service to a predetermined market segment. It links all the chain partners within and across organization to work competitively by forming the partnerships together with the integration of business processes, technical and organizational aspects. The successful implementation of supply chain management depends on many soft issues (strategic/behavioural). The soft issues of supply chain models can be dealt through proper information sharing, communication and coordination between the stages of supply chain. Vendor managed inventory is a proven concept for successful collaborative and cooperative agreements in supply chain. This chapter reviews some of the soft issues in two-echelon supply chain models and proposes a classification schema. This chapter surveys the theoretical background and application of vendor managed inventory systems based on environment, operational issues and solution approaches. Hence it is concluded that the framework presented in this chapter would aid supply chain managers and researchers to further look into the soft issues while modeling supply chain with information technology enabled vendor managed inventory systems.

scholarly journals Analysis of a Vendor Managed Consignment Inventory System with Kan-ban Withdrawals and Payment Delays

2018 ◽  
Vol 6 (1) ◽  
pp. 41-61
Author(s):  
Ravi Kumar Ramrakhyani ◽  
Mohammad Samie Tootooni ◽  
Nagen Nagarur
Keyword(s):  
Supply Chain ◽  
Manufacturing Systems ◽  
Manufacturing Industry ◽  
Inventory Systems ◽  
Vendor Managed Inventory ◽  
Time Value Of Money ◽  
Time Value ◽  
Supply Chain Management System ◽  
Push And Pull ◽  
Value Of Money

Vendor Managed Inventory (VMI) System with Consignment Inventory (CI) policy is a solution for many supply chain leaders in a highly competitive market. In this paper, totally eight different inventory supply chain models are studied. The profit function of supplier and manufacturer in different environments are compared in order to show the profitability of the overall supply chain management system in a manufacturing industry with different time horizons. The inventory systems are applied on a supply chain consisting of a single supplier and a manufacturer. The main focus of this study is to analyze the effect of payment deferral and the time value of money in push and pull (Kanban) manufacturing systems when VMI-CI policy is applied.

scholarly journals EVALUATING VENDOR MANAGED INVENTORY SYSTEMS: HOW INCENTIVES CAN BENEFIT SUPPLY CHAIN PARTNERS

2017 ◽  
Vol 18 (1) ◽  
pp. 163-179 ◽  
Author(s):  
Sule BİRİM ◽  
Cigdem SOFYALIOGLU
Keyword(s):  
Supply Chain ◽  
Financial Incentives ◽  
Discrete Event ◽  
Inventory Systems ◽  
Vendor Managed Inventory ◽  
Traditional System ◽  
Profit Distribution ◽  
Event Simulation ◽  
Order Management ◽  
The Individual

In a vendor managed inventory (VMI) system, the effects of financial incentives on the entire supply chain (SC) and on the individual firms are investigated in this study. To this end, order management, order replenishment and inventory control activities of a two-echelon SC are examined via modeling using discrete event simulation. By determining the appropriate parameters for the incentives with scenario analysis, balanced profit distribution between buyers and a supplier in VMI is established. Simulation outputs of the traditional model, VMI only and VMI with incentives models are compared based on profits with paired comparisons. In VMI with incentives, both buyers, and the supplier experience higher benefits than the traditional system. This study provides a new method which eliminates the unbalanced benefit distribution due to VMI and offers almost equal benefits to the participating firms. With financial incentives, firms are encouraged to share information with each other to work in a coordinated SC.

scholarly journals Simulation Modeling for Analysis of a (Q, r) Inventory System under Supply Disruption and Customer Differentiation with Partial Backordering

2012 ◽  
Vol 2012 ◽  
pp. 1-10 ◽  
Author(s):  
Parham Azimi ◽  
Mohammad Reza Ghanbari ◽  
Hasan Mohammadi
Keyword(s):  
Simulation Modeling ◽  
Inventory System ◽  
Inventory Systems ◽  
Total Annual Cost ◽  
Single Product ◽  
Supply Disruptions ◽  
Continuous Review ◽  
Partial Backordering ◽  
Customer Differentiation ◽  
The Impact

We have modeled a new (Q, r) inventory system which involves a single product, a supplier, and a retailer with customer differentiation under continuous review inventory policy. The supplier provides the retailer with all requirements, and the retailer sells products to the customers. The supplying process is randomly subject to disruptions. Partial backordering is applied when a stock out occurs, and customer can select either to leave the system without purchasing or to backorder products. The customers are categorized into two main classes regarding to their backordering probabilities. The main contribution of this paper is including the customer differentiation in the inventory model. We used simulation technique to verify the impact of supply disruptions and customer differentiation and carried out sensitivity analysis. To test the performance of the model, we have compared our model to one from the latest related research. As the results show, the average of total annual cost of the (Q, r) inventory system is lower than that of the previously developed models such as (r, T) inventory systems.

Implementation of Vendor Managed Inventory (VMI) in Managing Intra Ocular Lenses (IOL) in Eye Care Organization

2015 ◽  
Vol 2 (9) ◽  
pp. 1 ◽  
Author(s):  
Nancy Sharma
Keyword(s):  
Supply Chain ◽  
Operational Efficiency ◽  
Care Organization ◽  
Healthcare Industry ◽  
Vendor Managed Inventory ◽  
Eye Care ◽  
Inventory Cost ◽  
Innovative Strategies ◽  
Industry Hospital

Nowadays healthcare has a completely changed scenario as compared with the early 90’s. As more and more profit generating hospitals are coming in the industry, hospital and healthcare is no longer remains a charitable or philanthropically act. So to be remain in the market and compete within hospitals need to now focus on the different and innovative strategies in every aspect. Supply chain and operations is one of the important key of any organization which directly impact on business and revenue. Vendor Managed inventory is not a new concept but it is not efficiently utilized in service and healthcare industry as of now. Some retail and automobile industries has utilized the concept and also able to reduce the inventory cost with manageable position of stock out and over stocking position. As hospital’s key functioning is to deal with life of patients on day to day so position of material need to be necessarily on right time and right place. This paper is based on the insight of the application of vendor managed inventory in the management of inventory for the IOL (Intra ocular lenses) that is used for the surgeries in the eye hospital. We will also study the questionnaire on the acceptability of the concept of vendor managed inventory in the hospital that will help to assess the acceptability of VMI in hospital and healthcare industry. Also a framework matrix is designed to understand the relation of VMI with the revenue earning and smoothening of operational efficiency.

scholarly journals Supply Chain Coordination Contracts under Double Sided Disruptions Simultaneously

2015 ◽  
Vol 2015 ◽  
pp. 1-9 ◽  
Author(s):  
Huan Zhang ◽  
Yang Liu ◽  
Jingsi Huang
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Optimal Price ◽  
Supply Chain System ◽  
Pricing Policy ◽  
Product Cost ◽  
Numerical Examples ◽  
Supply Chain Contracts ◽  
Different Types ◽  
Key Factor

Supply chain coordination models are developed in a two-echelon supply chain with double sided disruptions. In a supply chain system, the supplier may suffer from the product cost disruption and the retailer suffers from the demand disruption simultaneously. The purpose of this study is to design proper supply chain contracts, under which the supply chain with double sided disruption can be coordinated. Firstly, the centralized decision-making models are applied to find the optimal price and quantity under three cases as the baseline. The different cases are divided by the different relationship between the product cost disruption and the demand disruption. Secondly, two different types of contracts are introduced to coordinate the whole supply chain. One is all-unit wholesale quantity discount policy (AQDP) contract, and the other one is capacitated linear pricing policy (CLPP) contract. And it is found out that the gap between the demand disruption and the product cost disruption is the key factor to influence the supply chain coordination. Some numerical examples and sensitivity analysis are given to illustrate the models. The AQDP contracts are listed out under different cases to show how to use it under double sided disruptions.

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