Study on a Two-Echelon Supply Chain VMI Model under Demand Uncertainty

Vendor-managed inventory (VMI) model is a new inventory management mode in supply chain, under which the supplier takes charge of inventory management, and bears all inventory risk. A two-echelon supply chain, operating under a VMI mode, is put forward. And the products are perishable and sold over a single selling season. And a simple VMI model is first discussed, and the supplierpsilas optimal inventory decision is obtained. Then the paper introduces a more complex supply chain with two retailers, and the transshipment tactics is considered.