An analysis of manufacturer benefits under vendor-managed systems

Vendor-Managed Inventory (VMI) has attracted a lot of attention due to its benefits such as fewer stock-outs, higher sales, and lower inventory levels at the retailers. Vendor-Managed Availability (VMA) is an improvement that exploits the advantages beyond VMI. This article analyzes the benefits beyond information sharing and assesses the motivation for the manufacturer (vendor) behind joining such a program. It is shown that such vendor-managed systems provide increased flexibility in manufacturer's operations and may bring additional benefits. An analysis is presented on how the system parameters


Analysis of a deterministic demand production/inventory system under nonstationary supply uncertainty
Gullu, R; Onol, E; Erkip, N (Informa UK Limited, 1997-08-01)
In this article we investigate a periodic review inventory model under deterministic dynamic demand and supply unavailability. In a given period, supply is either available or completely unavailable with given probabilities. Supply unavailability probabilities are nonstationary over time. We show the optimality of an order-up-to level policy, and obtain a newsboy-like formula that determines the optimal order-up-to levels. Our formula would provide guidence as to the appropriate amount of inventory to stock...
An integrated inventory control and vehicle routing problem
Solyalı, Oğuz; Süral, Haldun; Department of Industrial Engineering (2005)
In this study, we consider a logistics system, in which a single supplier delivers a product to multiple retailers over a finite time horizon. Supplier decides on the amount to order in each period and services retailers facing deterministic dynamic demand via a fleet of vehicles having limited capacity. Each retailer has specific minimum and maximum levels of inventory in an order-up-to level inventory policy setting. The problem is to simultaneously determine the quantity of product to order to the suppli...
Benefits of vendor managed inventory policy in a manufacturer-retailer supply chain
Erdoğdu, Özen; Savaşaneril Tüfekci, Seçil; Department of Industrial Engineering (2009)
Vendor Managed Inventory (VMI) policy has been widely used in various supply chains due to the benefits such as lower inventory levels and costs of retailer, and less frequent stock outs. In this study, the benefits of VMI policy in a manufacturer-retailer setting are analyzed under three different scenarios (Traditional Decision Making, VMI agreement and Centralized Decision Making). A manufacturer that produces a particular product is considered and that product is sold to a retailer operating under known...
The effect of inspection error on quality and producer losses: the case of nominal-the-best type quality characteristic and rework
Köksal, Gülser; Dolgun, Leman Esra; Batmaz, İnci (Inderscience Publishers, 2013-01-01)
In this study, the effect of inspection error (IE) on quality and producer losses is investigated for a nominal-the-best type quality characteristic determined by a manufacturing process centre with a separate rework unit. The probability distribution and the first two moments of the resulting quality characteristic values are derived and used together with Markov chain models and simulation to study the quality and producer losses and the related statistics for various processes and gage capability levels....
The inventory routing problem with deterministic order-up-to level inventory policies
Pınar, Özlem; Süral, Haldun; Department of Industrial Engineering (2005)
This study is concerned with the inventory routing problem with deterministic, dynamic demand and order-up-to level inventory policy. The problem mainly arises in the supply chain management context. It incorporates simultaneous decision making on inventory management and vehicle routing with the purpose of gaining advantage from coordinated decisions. An integrated mathematical model that represents the features of the problem is presented. Due to the magnitude of the model, lagrangean relaxation solution ...
Citation Formats
S. Savaşaneril Tüfekci, “An analysis of manufacturer benefits under vendor-managed systems,” IIE TRANSACTIONS, pp. 455–477, 2010, Accessed: 00, 2020. [Online]. Available: