A Research On Vendor Managed Inventory (VMI)

With increased globalization and competition in the current market, supply chain has become longer and more complicated than ever before. An effective and efficient supply chain is crucial and essential to a successful firm. In a supply chain, inventories are a very important component as the investment in inventories is enormous. Inventory management is always coupled with other functions, for example sourcing, manufacture and marketing. Vendor managed inventory is a new inventory management strategy in supply chain management. Vendor is defined as collaboration between a supplier and a retailer for the lowest cost, the inventory management decisions are made by the vendor on behalf of the retailer.In this dissertation, firstly elaborated this article research background and significant proposed the VMI of supply chain management environment studies conditions at home and oversea. Secondly we introduced the details of VMI, such as theoretical foundation, and original, characteristics and operating mechanism. Thirdly applied mathematical models to analyze the VMI's effect on the performance of supply chain, including short tern benefit, long term benefit and value added mechanism. At following, based on case study of Boeing and K Company, we got the implementation condition of VMI. At last, systemic proposed the application strategy of vendor managed inventory.