Study On The Revenue Sharing Model Based On VMI Model And JMI Model

In the tide of economic globalization, the competition between the enterprises becomes into that in the supply chain. So inventory management becomes more and more important in the supply chain management. If inventory management is advanced, the cost of whole supply chain will reduce and profit will increase. For cutting down inventory level, the integrated inventory management model appears, in which the two representative models are Vendor Management Inventory (VMI model) and the Joint Management Inventory (JMI mode). There two inventory need reasonable allocation mechanism of the profits to optimize the inventory. Because the reasonable allocation mechanism of the profits is an important guarantee to achieve risk-sharing of members in the supply chain and to remain the stability of supply chain. It is also one of the key issues that must be addressed in the supply chain management.In this paper, it reviews about vendor management inventory model, the joint management inventory model and the distribution of profits in the supply chain, and proposes profit distribution problems of supplier and retailer under VMI model and JMI model. First, both profit model of VMI and traditional model are established. Based on comparison of the profits of retailers, suppliers and the whole supply chain, it can be drawn that the profits of retailers, suppliers and system increase by implementing VMI model, which is also be verified by the numerical example. Furthermore, the advantages and limitations of VMI model are summarized and the applicable conditions are given out. Second, the profit models of JMI implemented before and after are established, Based on analyzing the profits of retailers, suppliers and the whole supply chain by comparison, It can be drawn the profits of retailer and supplier increase after implementing JMI model which is also be proved by the numerical example. At the same time, the advantages and limitations of JMI model and the applicable conditions are summarized.