The Inventory Benefit of Shipment Coordination and Stock Rebalancing in a Supply Chain

In this paper, we examine two information-based supply-chain efforts that are often linked to Vendor-Managed Inventory (VMI) programs. Specifically, we consider a supplier serving multiple retailers located in a close proximity. The first effort uses information on the retailers' inventory positions to coordinate shipments from the supplier to enjoy economies of scale in shipments, such as full truckloads.The second effort uses the same information for eventual unloading of the shipments to the retailers to rebalance their stocking positions. How much benefit do we gain from such initiatives? What are the relative benefits of the two initiatives? What are the drivers of such benefits? This paper seeks answers to these questions.

[1]  David F. Pyke,et al.  Inventory management and production planning and scheduling , 1998 .

[2]  Sven Axsäter,et al.  Exact and Approximate Evaluation of Batch-Ordering Policies for Two-Level Inventory Systems , 1993, Oper. Res..

[3]  Kamran Moinzadeh,et al.  Two-Parameter Approximations For Multi-Echelon Repairable Inventory Models With Batch Ordering Policy , 1987 .

[4]  Christopher S. Tang,et al.  The Value of Information Sharing in a Two-Level Supply Chain , 2000 .

[5]  S. Viswanathan.  Note. Periodic Review s, S Policies for Joint Replenishment Inventory Systems , 1997 .

[6]  B. D. Sivazlian.  A Continous-Review (s, S) Inventory System with Arbitrary Interarrival Distribution between Unit Demand , 1974, Oper. Res..

[7]  Chung-Yee Lee,et al.  Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems , 2000 .

[8]  Fangruo Chen,et al.  Evaluating Echelon Stock R, nQ Policies in Serial Production/Inventory Systems with Stochastic Demand , 1994 .

[9]  Derek A. Atkins,et al.  Periodic Versus Can-Order Policies for Coordinated Multi-Item Inventory Systems , 1988 .

[10]  R. Kapuściński,et al.  Value of Information in Capacitated Supply Chains , 1999 .

[11]  A. Federgruen,et al.  Coordinated Replenishments in a Multi-Item Inventory System with Compound Poisson Demands , 1984 .

[12]  Pricha Pantumsinchai.  A Comparison of Three Joint Ordering Inventory Policies , 1992 .

[13]  Lawrence M. Wein,et al.  Heavy Traffic Analysis of the Dynamic Stochastic Inventory-Routing Problem , 1999, Transp. Sci..

[14]  M. Savelsbergh,et al.  The Inventory Routing Problem , 1998 .

[15]  James E. Ward,et al.  Risk-Pooling Along a Fixed Delivery Route Using a Dynamic Inventory-Allocation Policy , 1995 .

[16]  Marshall L. Fisher,et al.  Supply Chain Inventory Management and the Value of Shared Information , 2000 .