The value of VMI beyond information sharing under time-varying stochastic demand

Devendra Choudhary and Ravi Shankar

International Journal of Production Research, 2015, vol. 53, issue 5, 1472-1486

Abstract: This study aims to determine the incremental value vendor-managed inventory (VMI) provides beyond that of independent decision-making with full information sharing (IS) under time-varying stochastic demand with service-level constraints. For this purpose, we apply mixed integer linear programming formulations to examine benefits for a supplier, a retailer and the system as a whole. To highlight the benefits of VMI vs. IS, a comprehensive numerical study is carried out considering a large number of business settings under both static and rolling horizons.

Date: 2015
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DOI: 10.1080/00207543.2014.951093

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