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VMI versus information sharing: an analysis under static uncertainty strategy with fill rate constraints

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  • Devendra Choudhary
  • Ravi Shankar
  • M.K. Tiwari
  • Arun Kr. Purohit

Abstract

A vendor-managed inventory (VMI) relationship between a downstream retailer and an upstream vendor consists of two distinct components: (i) information sharing (IS) and (ii) a shift in decision-making responsibility. This study compares these two components of VMI in a two-stage serial supply chain based on the ‘static uncertainty’ strategy under dynamic and random demand with fill rate constraints. Numerical experiments are conducted using analytical models to identify the conditions where the incremental value of VMI over IS is significant. The results provide guidelines relevant to academia and supply chain practitioners in taking VMI adoption decision above and beyond IS according to their specific business environment.

Suggested Citation

  • Devendra Choudhary & Ravi Shankar & M.K. Tiwari & Arun Kr. Purohit, 2016. "VMI versus information sharing: an analysis under static uncertainty strategy with fill rate constraints," International Journal of Production Research, Taylor & Francis Journals, vol. 54(13), pages 3978-3993, July.
  • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:13:p:3978-3993
    DOI: 10.1080/00207543.2016.1168943
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    Cited by:

    1. Jin Sha & Sisi Zheng, 2023. "Analysis of Sub-Optimization Impact on Partner Selection in VMI," Sustainability, MDPI, vol. 15(3), pages 1-11, February.
    2. A. V. Thomas & Biswajit Mahanty, 2021. "Dynamic assessment of control system designs of information shared supply chain network experiencing supplier disruption," Operational Research, Springer, vol. 21(1), pages 425-451, March.
    3. Zhang, Guoqing & Shi, Jianmai & Chaudhry, Sohail S. & Li, Xindan, 2019. "Multi-period multi-product acquisition planning with uncertain demands and supplier quantity discounts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 132(C), pages 117-140.

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