 Vendor managed inventory models for single-vendor multi-retailer supply chains with quality considerationM.A. Darwish, O.M. Odah and S.K. Goyal International Journal of Industrial and Systems Engineering, 2014, vol. 18, issue 4, 499-527 Abstract: In this paper, quality of items is incorporated in two VMI models for a single-vendor multi-retailer supply chain. The first model is for a decentralised supply chain where the vendor's expected profit is maximised. The other model, however, is for a centralised supply chain where the expected system profit is maximised. It is assumed that the lot received by vendor contains a random number of nonconforming items and, thus, inspection is performed on the incoming lot before it is delivered to retailers. In addition, we assume that nonconforming items are sold as a single batch to a secondary market at a reduced price. We also assume that the inspection process is perfect and is performed at a finite rate. In the proposed models, we incorporate a VMI contract which includes an upper limit on retailer's inventory level. In order to encourage cooperation between vendor and retailers, we propose a scheme that distributes the extra profit obtained by the integrated solution between the vendor and retailers. Keywords: supply chain management; SCM; vendor managed inventory; multiple retailers; inventory management; inventory modelling; VMI models; item quality; vendor profit; system profit; cooperation. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijisen:v:18:y:2014:i:4:p:499-527 Access Statistics for this article More articles in International Journal of Industrial and Systems Engineering from Inderscience Enterprises Ltd |
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