Research On Distribution Center Replenishment Distribution Strategies For VMI Systems

Vendor Management Inventory (VMI) is a co-operation strategy between customer and supplier. Supplier manages inventory under a framework agreement between the two sides, which is a new representative inventory management thought. As the main carrier for logistics, distribution centers connect upstream supply side with downstream demand side. Besides, they are playing roles in products'increasing in value timely and spatially and significantly affecting the operating efficiency of the entire supply chain. At present, many multinational companies and well-known domestic manufacturing firms implement VMI and enjoy the results increasing inventory turn, reducing inventory costs, improving rapid response capabilities, upgrading enterprise value by optimization of overall supply chain.From the perspective of the whole supply chain, this dissertation studies and contrasts several replenishment distribution strategies which are used by distribution centers based on VMI. Base on the time-based replenishment distribution strategy, the paper analyzes distribution centers quantity-based replenishment distribution strategy, simultaneously, taking into account of the replenishment distribution strategy deeply when distribution centers'distribution capacities are insufficient. The dissertation intends to achieve the optimal replenishment quantity and distribution cycle (distribution quantity), so as to minimize the long-term average cost. The model employs the renewal theory of Stochastic Process and adopts the Restrain Extreme Value Theory in Non-Linear Programming of Operation Research as the calculation approach. Indicated by analyzing calculation examples and comparing cost:For functionality production, distribution centers'quantity-based replenishment distribution strategy is generally superior to distribution centers'time-based replenishment distribution strategy. For innovative and emergency production, it is more appropriate to select time-based replenishment distribution strategy. When the distribution centers'distribution capacity is concerned, distribution capacities increasing have significant impact on distribution cycle and the long-term average cost.The dissertation provides practical theoretical basis for selecting distribution centers'replenishment distribution strategy. For over all supply chain, it can assist the supply chain to optimize the system cost, increase supply chain's overall operation efficiency, promote its competition force, and reduce overall supply chain's logistics operating costs, as well as explore the company's"Third Profit Source". For distribution centers, reasonable replenishment distribution strategies bring faster inventory turn, predict accuracy inventory levels, enhance the storage space utilization, improve customer service levels, acquire transport scale effect, enhance rapid response capacity, and reduce logistics operational cost.