Study On Inventory Management And Coordination In Two-Echelon Supply Chains

The paper studies inventory management and cooperation in two-echelon supplychain system. Firstly, a model with one manufacture and two retailers is consideredunder stochastic demand and market research, and two systems are compared: one inwhich the retailers hold stocks separately and the other in which they cooperate tocentralize stocks. Three important conclusions are brought forward and proved. Then,profits division mechanisms and information problems in inventory management areinvestigated. In a decentralized decision system consisting of one supplier and multipleretailers, common replenishment epochs strategy is introduced, and cooperation basedon common replenishment epochs strategy and transfer price discount is investigated inthis system. The research first considers the condition that the retailers' inventoryholding cost rate are fixed, then extends the results to settings in which the retailers'inventory holding cost rate depend on the transfer price. The study shows cooperationcan improve system performance. Order quantity cooperation between the supplier andthe retailer is investigated according to principle-agent theory, when the retailer'sinventory holding cost is shared information and is asymmetric information respectively.The study shows that information sharing can decrease both parties' costs. The paperalso analyzes inventory management and cooperation between a manufacture adoptingmass customization mode and his supplier qualitatively. Finally, the foundation andimplementing of inventory cooperation mechanism are discussed.