Analysis of a Vendor Managed Consignment Inventory System with Kan-ban Withdrawals and Payment Delays
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Abstract
Vendor Managed Inventory (VMI) System with Consignment Inventory (CI) policy is a solution for many supply chain leaders in a highly competitive market. In this paper, totally eight different inventory supply chain models are studied. The profit function of supplier and manufacturer in different environments are compared in order to show the profitability of the overall supply chain management system in a manufacturing industry with different time horizons. The inventory systems are applied on a supply chain consisting of a single supplier and a manufacturer. The main focus of this study is to analyze the effect of payment deferral and the time value of money in push and pull (Kanban) manufacturing systems when VMI-CI policy is applied.
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October 1, 2018
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Sucky, E. (2009). The bullwhip effect in supply chains—An overestimated problem?. International Journal of Production Economics, 118(1), 311-322.
Wang, Y., Jiang, L., & Shen, Z. J. (2004). Channel performance under consignment contract with revenue sharing. Management science, 50(1), 34-47.
Cachon, G. P., & Fisher, M. (2000). Supply chain inventory management and the value of shared information. Management science, 46(8), 1032-1048.
Cárdenas-BarróN, L. E., Taleizadeh, A. A., & TreviñO-Garza, G. (2012). An improved solution to replenishment lot size problem with discontinuous issuing policy and rework, and the multi-delivery policy into economic production lot size problem with partial rework. Expert Systems with Applications, 39(18), 13540-13546..
Cárdenas-Barrón, L. E., Treviño-Garza, G., & Wee, H. M. (2012). A simple and better algorithm to solve the vendor managed inventory control system of multi-product multi-constraint economic order quantity model. Expert Systems with Applications, 39(3), 3888-3895.
Chen, F., Drezner, Z., Ryan, J. K., & Simchi-Levi, D. (2000). Quantifying the bullwhip effect in a simple supply chain: The impact of forecasting, lead times, and information. Management science, 46(3), 436-443.
Christopher, M. (1999). Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service Financial Times: Pitman Publishing. London, 1998 ISBN 0 273 63049 0 (hardback) 294+ 1× pp.
Copacino, W. C. (1993). Logistics strategy: how to get with the program. Traffic Management, 32(8), 23-24.
Cottrill, K. (1997). Reforging the supply chain. Journal of Business Strategy, 18(6), 35-39.
Darwish, M. A., & Odah, O. M. (2010). Vendor managed inventory model for single-vendor multi-retailer supply chains. European Journal of Operational Research, 204(3), 473-484.
Dejonckheere, J., Disney, S. M., Lambrecht, M. R., & Towill, D. R. (2003). Measuring and avoiding the bullwhip effect: A control theoretic approach. European Journal of Operational Research, 147(3), 567-590.
Disney, S. M., Potter, A. T., & Gardner, B. M. (2003). The impact of vendor managed inventory on transport operations. Transportation research part E: logistics and transportation review, 39(5), 363-380.
Dong, Y., & Xu, K. (2002). A supply chain model of vendor managed inventory. Transportation research part E: logistics and transportation review, 38(2), 75-95.
Gerchak, Y., & Wang, Y. (2004). Revenue‐sharing vs. wholesale‐price contracts in assembly systems with random demand. Production and operations Management, 13(1), 23-33.
Giannoccaro, I., & Pontrandolfo, P. (2004). Supply chain coordination by revenue sharing contracts. International journal of production economics, 89(2), 131-139.
GGümüş, M., Jewkes, E. M., & Bookbinder, J. H. (2008). Impact of consignment inventory and vendor-managed inventory for a two-party supply chain. International Journal of Production Economics, 113(2), 502-517.
Holmström, J., Främling, K., Kaipia, R., & Saranen, J. (2002). Collaborative planning forecasting and replenishment: new solutions needed for mass collaboration. Supply chain management: An international journal, 7(3), 136-145.
Huang, Y. F., & Lin, Y. S. (2005). An EPQ model under permissible delay in payments and cash discount. Journal of Applied Sciences, 5(2), 273-276.
Karsten, F., & Basten, R. J. (2014). Pooling of spare parts between multiple users: How to share the benefits?. European journal of operational research, 233(1), 94-104.
Lamb, M. R. (1997). Vendor managed inventory:[service center] customers like the possibilities. Metal Center News(USA), 37(2), 42-44.
Lee, H. L., Padmanabhan, V., & Whang, S. (1997). Information distortion in a supply chain: The bullwhip effect. Management science, 43(4), 546-558.
Leuveano, A. C., Jafar, F. A. B., & Muhamad, M. R. B. (2012, August). Development of genetic algorithm on multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system. In Uncertainty Reasoning and Knowledge Engineering (URKE), 2012 2nd International Conference on (pp. 78-81). IEEE.
Li, S., Zhu, Z., & Huang, L. (2009). Supply chain coordination and decision making under consignment contract with revenue sharing. International Journal of Production Economics, 120(1), 88-99.
Michaelraj, L. A., & Shahabudeen, P. (2009). Replenishment policies for sustainable business development in a continuous credit based vendor managed inventory distribution system. Computers & Industrial Engineering, 56(1), 260-266.
Pasandideh, S. H. R., Niaki, S. T. A., & Nia, A. R. (2011). A genetic algorithm for vendor managed inventory control system of multi-product multi-constraint economic order quantity model. Expert Systems with Applications, 38(3), 2708-2716.
Piplani, R., & Viswanathan, S. (2003). A model for evaluating supplier-owned inventory strategy. International Journal of Production Economics, 81, 565-571.
Sadeghi, J., Sadeghi, S., & Niaki, S. T. A. (2014). A hybrid vendor managed inventory and redundancy allocation optimization problem in supply chain management: An NSGA-II with tuned parameters. Computers & Operations Research, 41, 53-64.
Shah, J., & Goh, M. (2006). Setting operating policies for supply hubs. International Journal of Production Economics, 100(2), 239-252.
Stalk, G., Evans, P., & Shulman, L. E. (1992). Competing on capabilities: The new rules of corporate strategy. Harvard business review, 70(2), 57-69.
Sucky, E. (2009). The bullwhip effect in supply chains—An overestimated problem?. International Journal of Production Economics, 118(1), 311-322.
Wang, Y., Jiang, L., & Shen, Z. J. (2004). Channel performance under consignment contract with revenue sharing. Management science, 50(1), 34-47.
How to Cite
Analysis of a Vendor Managed Consignment Inventory System with Kan-ban Withdrawals and Payment Delays. (2018). Industrial and Systems Engineering Review, 6(1), 41-61. https://doi.org/10.37266/ISER.2018v6i1.pp41-61
How to Cite
Analysis of a Vendor Managed Consignment Inventory System with Kan-ban Withdrawals and Payment Delays. (2018). Industrial and Systems Engineering Review, 6(1), 41-61. https://doi.org/10.37266/ISER.2018v6i1.pp41-61
