Study On The Economical Effect Of Vendor Managed Inventory

VMI (Vendor Managed Inventory), which is a new strategy of control for inventory, is well known as its great function of eliminating the bull effect. However, The supplier's economical effect that is influenced on by VMI strategy is debated under a way, in spite of the downstream enterprise's economical effect can be enhanced greatly.In this article, the supply chain including one supplier and several retailers is researched. Both definite and indefinite demands are studied on. And this article also realized that the deferent initiative (supplier or retailer) makes deferent result. At the same time, the author tries to find a rational space of supplier's sales price which can enhance both supplier and retailer's benefit base on the stable sales price of retailer when the VMI strategy is conducted.A inventory strategy of(Q, q)is established in order to study on the indefinite demand. And the demand velocity is used as the random variable to discuss the profit in deferent condition. What's more, the compression in the supply chain is considered, and the game between supplier and retailer in the same supply chain is analyzed when VMI strategy is conducted.The conclusion can be arrived here, that is VMI strategy have the ability to make each member's profit higher than before without the compression in the supply chain. However, the compression lies in most of real supply chain, and the supplier's profit has been impaired, so the supplier is forced to join the VMI instead of his vulnerary ideal. Sometimes, the supplier will do some incredible activity in order to increase their profit if he gets the chance, which will damage the development of the whole supply chain. Hence, in order to make the whole supply chain to be better and better, both supplier and downstream enterprise must be cooperated honestly.