Several Models Of Two-echelon Supply Chain Under Vmi Cooperation And Permissible Delay In Payment

With the development of the Economic globalization and integration, the competetion between different companies gradually gets fierce.Therefore, improving the management efficiency becomes a critical messure for the companies to enhance their competition power.Then,most companies begin to attach much importance to their management and Supply Chain Management as a new management idea becomes popular and penetrates to various industries. Now, many compnies has already brought this idea into their daily management operation. Supply Chain Management is a cross-industry management,and it is a kind of cooperation between different companies collaborating with each other to maximize the interest for all of them. In order to make profit, each company as a single must pay attention to the connection between its upstream and downstream partners and itself.Inventory management is a key point for the company's whole management, so the companies use the Supply Chain idea to manage their inventory.Then many companies'inventory management have been innovated and VMI(Vendor Manageded Inventory) has come into being.The mode of inventory management has been improved,which reduced the companies'cost and boost their profit greatly.The improvement of management can bring benefit to the company, and the reasonable evolution of the coopration mode can also improve the company's competitive advantage. Recently, most companies have already adopted the measure of delayed payment.Because the partners are allowed to be delayed in payment, their enthusiam has been greatly inspired.Hence, both sides would like to maintain their good relationship of cooperation and achieve their objectives of long-term transaction.Foreign countries have already had many relatively mature researches about Vendor-Managed Inventory management model.Moreover,they have also put it into practical economic production. In our country, the academic study of this new model has also been broad. While,its practical use does not extensively as in other countries.For many companies, implementing this measure must'have some substantial obstacles.Besides,the managers'suspicion of this measure should not be neglected as an influence aspect, either. Therefore, we also need to continue to study the VMI's implementation profit. So far, the majority of the literature study about VMI cooperation has been done with the premise that both the suppliers and the retailers have enough intial capital, but in reality most of them are facing a shortage of funds.So, our research should be based on the real economic situations. In the two-echelon supply chian system, the supplier offer the VMI service to the retailer, and then the retailer's cost can be reduced greatly.Furthermore, both sides could achieve their objectives of long-time cooperation.In fact, in order to stimulate the retailer's enthusiasm to the greatest degree, the supplier always allow them to delay their payments.Presently, foreign countries have already had a lot of research about this measure,but almost all of the studies have been analyzed from the point of the retailer.For Supply Chain Management, the academic study should also be analyzed from the supplier's perspective.Especially, when it is analyzed from the perspective of the whole Supply'Chain, it is will be more valuable.In the actual economic production,for triggerring retailer's enthusiasm, the supplier has already adopted the VMI cooperation and also allowed the retailer to delay its payment at the same time.While, in the academic filed, there isn't any study illustrate this phenomenon yet. Therefore, this paper will attempt to explore it superficially.In this paper, we summarize the literatures about the VMI and the deferred payment.According to the real economic environment, we assume that both the supplier and the retailer in the two-echelon Supply Chain system have no initial capital, and then we analyze their cost before and after the VMI cooperation.In order to stimulate the retailer's enthusiasm,the supplier provide VMI serviece to it and also allow it to delay its payment.While, whether the supplier achieve its perceived purpose or not and how its own cost changes are all not definite.So, the fourth chapter of this paper will give some quantitative analysis about all of this.This paper analyzes the two sistuations separately by establishing appropriate models, and the results are:when the both sides of the two-echelon Supply Chain system have no initial capital, the VMI cooperation can also boost the retailer's enthusiasm. If the two sides take some kind cooperation like cost-sharing, both of them can achieve a win-win situation. When the retailer be offered the VMI service and also be allowed to delay the payment, its cooperation initiative must be improved further and the'supplier can achieve its own purpose.In order to stimulate the retailer to settle the account earlier, the supplier gives the retailer two different trade credit periods,and when the retailer pay the supplier after the first comparative short credit period,it can be given some proportions of the price-discount.For enjoying the price discount, when the time distance between the two trade credit periods are not too large, the retailer will choose the first period as the point of its payment.