An Inventory Model for Deteriorating Items Using Vendor-Managed Inventory Policy

In recent researches, vendor managed inventory (VMI) policy is rarely considered in the case of deteriorating items. This study considers the supply chain partner's collaboration via a VMI system and provides an EOQ model for a two-level supply chain (single supplier-single retailer) with stock-dependent demand and constant deterioration and backlogging rates, to examine the inventory management proceedings for VMI and non-VMI supply chains. The equations are simplified using a new approach in modeling. A comparison between the costs of two mentioned cases is done. The results of analytical examination of inventory costs with and without VMI show that VMI system in our proposed model always has the ability to reduce total costs of the supply chain and is always better than the traditional one. Some numerical examples and sensitivity analysis are also given to illustrate the application of the proposed model.