An analysis of manufacturer benefits under vendor-managed systems

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IIE TRANSACTIONS, vol.42, no.7, pp.455-477, 2010 (Journal Indexed in SCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 42 Issue: 7
  • Publication Date: 2010
  • Doi Number: 10.1080/07408170903459968
  • Title of Journal : IIE TRANSACTIONS
  • Page Numbers: pp.455-477
  • Keywords: Vertical collaboration, vendor-managed inventory, capacity management, operational flexibility, consignment stock, SUPPLY CHAIN, INVENTORY SYSTEMS, INFORMATION, CAPACITY, POLICIES, STOCK, MODEL


Vendor-Managed Inventory (VMI) has attracted a lot of attention due to its benefits such as fewer stock-outs, higher sales, and lower inventory levels at the retailers. Vendor-Managed Availability (VMA) is an improvement that exploits the advantages beyond VMI. This article analyzes the benefits beyond information sharing and assesses the motivation for the manufacturer (vendor) behind joining such a program. It is shown that such vendor-managed systems provide increased flexibility in manufacturer's operations and may bring additional benefits. An analysis is presented on how the system parameters