Vendor managed inventory and its effect in the supply chain

Many companies have tried to get the competitive advantage through the effective supply chain management. To manage the supply chain effectively, many strategy based on the shared information among the entities in supply chain has been developed. Although the supply chain members agree with the idea that the policy based on the shared information will be beneficial to improve the effective supply chain, they are reluctant to share their information owing to some barriers such as the expensive technology investment, personnel training and lack of mutual trust. The benefit from the sharing information may vary according to the supply chain environment. According to an environment of supply chain, the profit gained through the policy based on the shared information may be too low to collect the invested amounts or high enough to give proper compensation. To gain this insight, we analyze the impact of the Vendor Managed Inventory, which is one of the popular supply chain strategy based on the share information, in various supply chain environment. The simulation experiment shows in which environment their benefit from the policy based on the shared information will be increased (or decreased).