The inventory value of information sharing, continuous replenishment, and vendor-managed inventory

Yuliang Yao and Martin Dresner

Transportation Research Part E: Logistics and Transportation Review, 2008, vol. 44, issue 3, 361-378

Abstract: In this paper, we extend the models in the literature [Lee, H.L., So, K.C., Tang, C., 2000. The value of information sharing in a two-level supply chain. Management Science 46 (5), 626-643; Raghunathan, S., Yeh, A.B., 2001. Beyond EDI: impact of continuous replenishment program (CRP) between a manufacturer and its retailers. Information Systems Research 12 (4), 406-419] to analyze the benefits realized for manufacturers and retailers under information sharing (IS), continuous replenishment programs (CRP) or vendor managed inventory (VMI) and compare the distribution of benefits between manufacturers and retailers. Our analysis shows that IS, CRP, and VMI bring varying benefits in terms of inventory cost savings to firms, and that the benefits are not consistently distributed between retailers and manufacturers. Our findings also point to the managerial implications on how managers may decide the product sets and replenishment frequency for improved benefit realization under CRP and VMI.

Keywords: Supply; chain; management; Information; sharing; Continuous; replenishment; program; Vendor-managed; inventory (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (25)

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