Optimal Vendor-Managed Inventory Models for Single-Vendor Multiple-Retailer Supply Chains

This research developed an analytical approach for a single-vendor multiple retailer's vendor managed inventory system. In this paper, various factors like lead time, probability of producing defective items when process goes out of control, shipment size, and safety stock have been considered to modify the models available in earlier literature. Numerical models have been developed that helps in optimizing the total cost that may incur due to various factors at both vendor and retailer levels. Analysis has been carried out for single-vendor and multiple (four) retailers. The total cost that has been optimized is the summation of total vendor cost and total retailer cost. The condition under which each approaches may be preferred has been thoroughly discussed. Significant factors that influence the total cost of the system have been identified by means of various plots.