Response to "Note on supply chain integration in vendor managed inventory"

A note on supply chain integration in vendor managed inventory through van der Vlist and Yao et al. models is presented. Van der Vlist et al. extend the Yao et al. model in two ways to consider transportation costs comprising an additional per unit order cost and as an additional per shipment cost. Yao et al. implicitly include transportation as a component of order cost. The price reduction could have the effect of increasing overall demand and, thus, completely altering the analysis well beyond the scope of the model. The buyer's and supplier's cost functions would also be affected under a consignment assumption. the conclusions drawn by van der Vlist et al. depend not only on the extensions, but also on two questionable assumptions. A more suitable incorporation of these extensions into the Yao et al. model could form a basis for future work.