Consignment Stock Inventory Policy For A Single-vendor And Multi-buyers In Stochastic Demand

Consignment stock(CS)is an innovative approach to supply and stock management,based on a strong and continuous collaboration between vendor and buyer to create a win-win situation,where both partners have equal gain.It is an approach in which the vendor removes his inventory and maintains a stock of materials at the buyer’s plant.The vendor holds and manages inventories in which the information provided by the buyer helps the vendor to efficiently manage production.In this paper,we deal with a two-echelon inventory system in which one vendor supplies an item to multiple buyers.The study develops a single-vendor and multi-buyers consignment stock inventory model.The aim of the paper is to evaluate the economical benefits from the point of view of both the partners and the whole supply chain,following the adoption of a CS policy.(1)This article analyzes the consignment stock policy,shows the lake of the traditional policy in supply chain like forecasting,quick response,inventory and replenishment,and focuses on the impact of supply chain members in SC policy and the effect in supply chain cost reduction.(2)The analytical model developed in this thesis compares a CS policy with a traditional supply management system with the hypothesis that buyer’s demand is stochastic and the supply chain comprises of one vendors and m buyers.Stock-out risk and the variability of demand are also considered.(3)It develops an integrated framework to assist the analysis when addressing the problem of switching stock management policy from traditional to CS.Finally,the examples in chapter five show that consignment policy plays a significant role in Supply chain cost reduction.The study of consignment stock inventory policy for a single-vendor and multi-buyers in stochastic demand is focused in this paper.The findings obtained for the consignment stock application not only provides a theoretical basis and but also provides a new way for enterprises to implement consignment stock policy.