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Title: A vendor managed inventory on consignment with penalty as a supply chain coordination arrangement
Authors: Taleizadeh, Ata Allah
Tavakoli, Shayan
Konstantaras, Ioannis
Rabbani, Masoud
Type: Article
Subjects: FRASCATI::Natural sciences::Mathematics
FRASCATI::Social sciences::Economics and Business
Keywords: Vendor managed inventor
supply chain management
consignment stock
Issue Date: 2019
Source: RAIRO - Operations Research
Volume: 53
Issue: 4
First Page: 1343
Last Page: 1355
Abstract: This paper presents a mathematical two echelon vendor-managed inventory (VMI) model on consignment scheme in supply chain, in which the vendor pays a penalty for every extra unit which exceeds a specific upper limit to the buyer. In this arrangement the vendor can decide about the batch size he wants to transship to the buyer. Two cases are discussed in this paper; single vendor-single buyer and single vendor-two buyers. In this study after a review of coordination in supply chain and VMI on consignment, we discuss vendor-managed inventory scheme in comparison with traditional inventory control system. The optimal batch size is calculated and the paper investigates how a VMI on consignment arrangement with penalty can coordinate the supply chain. Numerical examples and sensitivity analysis is presented to illustrate the performance of model and the results.
ISSN: 0399-0559
Other Identifiers: 10.1051/ro/2018049
Appears in Collections:Department of Business Administration

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