Correction Based On The The Vmi Economic Effects Of The Supply Chain Management Model

As we all know, the inventory management is one inevitable sector and playing an important role in the enterprise whole operation, meanwhile it's also a key circle to provide the value added in whole value chains. Obviously, the inventory volume has the impact to the total cost of sole enterprise by the supply chain management also impacts and restricts the function of whole supply chain. Vender Managed Inventory (VMI), as a newly inventory management strategy, highly reflects the integrated SCM concept. Hence it's really an interesting topic to fulfill a VMI model effectively provided the project designed carefully and scientificallyThe paper does some work in several aspects as follows:The theories relating to SC inventory management are summarized and distinguished(1)In order to better understand and distinguish inventory management models, analyze and compare characteristic and strongpoint of the three SC inventory management model, Moreover comparison will find more meaning and models for SCinventory management.(2) Set up and perfect the cost model of SC inventory managementUntil now the important model of two-stage supply chain that analyze the economic effect on retailer and supplier brought by VMI is written by Yan Dong, etc. But the thesis only involves inventory carrying cost and order setup cost, not includes transportation cost. This paper perfects the cost model of two-stage supply chain and involves the transportation cost, which accord with reality.(3)Introduce price incentive mechanism into modelCooperate relation between cooperators and bring out advantage distribution plan, which ensure that retailer and supplier are both satisfactory and realize win-win for both cooperators.Through an analysis of model, reason why VMI is difficult to implement at the beginning has been found out. In case of not damaging the retailer's service level and participation enthusiasm, price incentive mechanism is used to balance the interest of cooperators. Only if every enterprises can benefit from supply chain, both sides could maintain whole interests of supply chain consciously.