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The inventory value of information sharing, continuous replenishment, and vendor-managed inventory

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  • Yao, Yuliang
  • Dresner, Martin

Abstract

In this paper, we extend the models in the literature [Lee, H.L., So, K.C., Tang, C., 2000. The value of information sharing in a two-level supply chain. Management Science 46 (5), 626-643; Raghunathan, S., Yeh, A.B., 2001. Beyond EDI: impact of continuous replenishment program (CRP) between a manufacturer and its retailers. Information Systems Research 12 (4), 406-419] to analyze the benefits realized for manufacturers and retailers under information sharing (IS), continuous replenishment programs (CRP) or vendor managed inventory (VMI) and compare the distribution of benefits between manufacturers and retailers. Our analysis shows that IS, CRP, and VMI bring varying benefits in terms of inventory cost savings to firms, and that the benefits are not consistently distributed between retailers and manufacturers. Our findings also point to the managerial implications on how managers may decide the product sets and replenishment frequency for improved benefit realization under CRP and VMI.

Suggested Citation

  • Yao, Yuliang & Dresner, Martin, 2008. "The inventory value of information sharing, continuous replenishment, and vendor-managed inventory," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(3), pages 361-378, May.
    • Handle: RePEc:eee:transe:v:44:y:2008:i:3:p:361-378
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    Cited by:

    1. Svetlana Nikolicic & Milorad Kilibarda & Marinko Maslaric & Dejan Mircetic & Sanja Bojic, 2021. "Reducing Food Waste in the Retail Supply Chains by Improving Efficiency of Logistics Operations," Sustainability, MDPI, vol. 13(12), pages 1-24, June.
    2. J. Zambujal-Oliveira, 2021. "Supply Chain Innovation Research: A Conceptual Approach of Information Management with Game Theory," Group Decision and Negotiation, Springer, vol. 30(2), pages 377-394, April.
    3. Erik Hofmann, 2017. "Big data and supply chain decisions: the impact of volume, variety and velocity properties on the bullwhip effect," International Journal of Production Research, Taylor & Francis Journals, vol. 55(17), pages 5108-5126, September.
    4. Jin Sha & Sisi Zheng, 2023. "Analysis of Sub-Optimization Impact on Partner Selection in VMI," Sustainability, MDPI, vol. 15(3), pages 1-11, February.
    5. Taleizadeh, Ata Allah & Shokr, Iman & Konstantaras, Ioannis & VafaeiNejad, Mahyar, 2020. "Stock replenishment policies for a vendor-managed inventory in a retailing system," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    6. Goran Avlijas & Vesna Vukanovic Dumanovic & Miljan Radunovic, 2021. "Measuring the Effects of Automatic Replenishment on Product Availability in Retail Stores," Sustainability, MDPI, vol. 13(3), pages 1-14, January.
    7. Choi, Tsan-Ming, 2013. "Local sourcing and fashion quick response system: The impacts of carbon footprint tax," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 55(C), pages 43-54.
    8. Guan, Ruoxi & Zhao, Xiaobo, 2010. "On contracts for VMI program with continuous review (r, Q) policy," European Journal of Operational Research, Elsevier, vol. 207(2), pages 656-667, December.
    9. Rad, Reza Hosseini & Razmi, Jafar & Sangari, Mohamad Sadegh & Ebrahimi, Zahra Fallah, 2014. "Optimizing an integrated vendor-managed inventory system for a single-vendor two-buyer supply chain with determining weighting factor for vendor׳s ordering cost," International Journal of Production Economics, Elsevier, vol. 153(C), pages 295-308.
    10. Babai, M.Z. & Boylan, J.E. & Syntetos, A.A. & Ali, M.M., 2016. "Reduction of the value of information sharing as demand becomes strongly auto-correlated," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 130-135.
    11. Falasca, Mauro & Kros, John F., 2018. "Success factors and performance outcomes of healthcare industrial vending systems: An empirical analysis," Technological Forecasting and Social Change, Elsevier, vol. 126(C), pages 41-52.
    12. Govindan, Kannan, 2015. "The optimal replenishment policy for time-varying stochastic demand under vendor managed inventory," European Journal of Operational Research, Elsevier, vol. 242(2), pages 402-423.
    13. Van der Heide, G. & Buijs, P. & Roodbergen, K.J. & Vis, I.F.A., 2018. "Dynamic shipments of inventories in shared warehouse and transportation networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 240-257.
    14. Li, Mengmeng & Mizuno, Shinji, 2022. "Comparison of dynamic and static pricing strategies in a dual-channel supply chain with inventory control," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    15. Sadeghi, Javad & Mousavi, Seyed Mohsen & Niaki, Seyed Taghi Akhavan & Sadeghi, Saeid, 2014. "Optimizing a bi-objective inventory model of a three-echelon supply chain using a tuned hybrid bat algorithm," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 274-292.
    16. Farnoush Farajpour & Mohammad Taghi Taghavifard & Amir Yousefli & Mohammad Reza Taghva, 2018. "Information Sharing Assessment in Supply Chain: Hierarchical Fuzzy Rule-Based System," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1-24, March.
    17. Yu, Yugang & Luo, Yifei & Shi, Ye, 2022. "Adoption of blockchain technology in a two-stage supply chain: Spillover effect on workforce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    18. Fidel Torres & César García-Díaz, 2018. "Evolutionary dynamics of two-actor VMI-driven supply chains," Computational and Mathematical Organization Theory, Springer, vol. 24(3), pages 351-377, September.
    19. Danese, Pamela & Romano, Pietro & Formentini, Marco, 2013. "The impact of supply chain integration on responsiveness: The moderating effect of using an international supplier network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 125-140.
    20. Chen, Pengyu & Liu, Xu & Zhou, Pin & Zhu, Stuart X., 2022. "The interplay between strategic inventories and cost misreporting in supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).
    21. Chen, Xianzhe & Zhang, Jun, 2009. "Optimal Dispatching Policy under Transportation Disruption," 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 207735, Transportation Research Forum.
    22. Caridi, Maria & Moretto, Antonella & Perego, Alessandro & Tumino, Angela, 2014. "The benefits of supply chain visibility: A value assessment model," International Journal of Production Economics, Elsevier, vol. 151(C), pages 1-19.
    23. Xu, Kefeng & Leung, Mark T., 2009. "Stocking policy in a two-party vendor managed channel with space restrictions," International Journal of Production Economics, Elsevier, vol. 117(2), pages 271-285, February.
    24. Weißhuhn, Sandria & Hoberg, Kai, 2021. "Designing smart replenishment systems: Internet-of-Things technology for vendor-managed inventory at end consumers," European Journal of Operational Research, Elsevier, vol. 295(3), pages 949-964.
    25. Zhang, Allan N. & Goh, Mark & Meng, Fanwen, 2011. "Conceptual modelling for supply chain inventory visibility," International Journal of Production Economics, Elsevier, vol. 133(2), pages 578-585, October.

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