Research On Supply Chain Coordination Of Fresh Agricultural Products Based On VMI Model

Twenty-first Century is a new era. With the rapid development of the economy, the pluralistic social values, fast update technology and mature concept of consumption, enterprises are being faced with the pressure of market competition of the hitherto unknown. The idea of supply chain management emerge as the times require in this condition to integrate the best resources distributed in different enterprises in the supply chain management. The node enterprises of supply chain is not facing the market in an isolated form, but as a cartel form to compete in the market. This combination forms can produce a strong market competitiveness, and competition in twenty-first Century will be the competition of supply chain.Fresh agricultural products are a special kind of perishable products, whose fresh degree will reduce in its’inventory time. According to incomplete statistics,the expected loss rate is controlled within 5% in the developed countries, only 1% in American, while in China 25%--30%. Therefore, it is very necessary to study Supply Chain Management of fresh agricultural products from the angle of supply chain management.Inventory management is the core issue in supply chain management, and the model of traditional inventory management that act separated will not fit the new environment. The mode of vendor managing inventory reflects the integration thoughts of supply chain partnership, which has attracted much research attention of scholars. According to researches for the fresh agricultural product based on VMI, people found that even though VMI model is able to integrate resources and improve the overall benefit of the supply chain, the suppliers bears the risk of inventory management in the supply chain, that the existence of the marginal benefit can not realize the efficient management of supply chain. Therefore, it is necessary to make the supply chain realize the coordinated optimization by using the reasonable contract to coordinate income.Based on VMI mode, this paper, taking the fresh agricultural products as the research background, use the combination approach of quantitative analysis and qualitative analysis to compare the centralized supply chain, the supply chain under the wholesale price and the expectative profit of the supply chain under VMI by analyzing different inventory models of fresh agricultural products in supply chain. The study found that because of the existence of "double marginal benefit" they all cannot achieve the supply chain coordination both the supply chain model under wholesale price and under vendor managing inventory. The main theme of this paper is to research the supply chain coordination of fresh agricultural products based on VMI model. As for the supply chain model under the wholesale price, it was the comparison of supply chain mode under VMI, and it coordinated the supply chain model of VMI by revenue sharing contract based on the supply chain model under the wholesale price and the centralized supply chain model and analyzed the equilibrium order quantity and the equilibrium expected profit of suppliers’ and retailers’. The paper also analyzed revenue sharing factors’ sensitivity and proposed suggestions for optimization and coordination of the supply chain.Finally, the paper summarized the full text and interpreted the important conclusions and the limitations of this study, and discussed and prospected the future research directions briefly.