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Smart Supply Chains with vendor managed inventory, coordination, and environmental performance

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  • De Giovanni, Pietro

Abstract

A dynamic brick-and-mortar Supply Chain (SC) evaluates the benefits of implementing smart applications and intelligent systems to improve the efficiency of a Vendor Managed Inventory (VMI). In the SC game, the manufacturer sets the production rate and replenishes the inventory at the retailer’s store. The retailer sets the price, which affects both the sales and the inventory. Firms share the revenues and the inventory costs through a sharing agreement. The inventory dynamics increase in the production rate, decrease in the sales and vary according to some stochastic and time-independent error terms. The adoption of a smart application allows the SC to remove these error terms. Nevertheless, the consulting company implementing the intelligent system charges fees that depend on the error term amplitude and inventory level. Furthermore, intelligent solutions allow the SC to better satisfy the consumers, although their impact on production and emissions may be detrimental questioning whether they lead to a responsible digitalization. We identify the conditions under which the adoption of a smart system is economically beneficial for the whole SC as well as its operational, environmental, and SC coordination implications.

Suggested Citation

  • De Giovanni, Pietro, 2021. "Smart Supply Chains with vendor managed inventory, coordination, and environmental performance," European Journal of Operational Research, Elsevier, vol. 292(2), pages 515-531.
    • Handle: RePEc:eee:ejores:v:292:y:2021:i:2:p:515-531
    DOI: 10.1016/j.ejor.2020.10.049
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    Cited by:

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    3. Chou, Yixuan & Tang, Wenjin, 2023. "Corporate advertising expense and share price synchronization," Finance Research Letters, Elsevier, vol. 56(C).
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    5. Núñez-Merino, Miguel & Maqueira-Marín, Juan Manuel & Moyano-Fuentes, José & Castaño-Moraga, Carlos Alberto, 2022. "Industry 4.0 and supply chain. A Systematic Science Mapping analysis," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    6. Saxena, Neha & Sarkar, Mitali & Sarkar, Biswajit, 2024. "Which retail strategy for shelf life products can satisfy consumers under game policy?," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    7. Xue Wang & Deqing Ma & Jinsong Hu, 2022. "Recycling Model Selection for Electronic Products Considering Platform Power and Blockchain Empowerment," Sustainability, MDPI, vol. 14(10), pages 1-44, May.
    8. Pietro De Giovanni, 2023. "Sustainability of the Metaverse: A Transition to Industry 5.0," Sustainability, MDPI, vol. 15(7), pages 1-29, March.
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    11. Denchai Panket & Panita Wannapiroon & Prachyanun Nilsook, 2024. "System Architecture of Electronic Asset Supply Chain Intelligent Platform for Digital Higher Education," Higher Education Studies, Canadian Center of Science and Education, vol. 14(1), pages 1-22, February.

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