Strategy Based On The Joint Inventory Management Supply Chain Inventory Optimization

Inventory costs are one of the important parts which are composed of supply chain's costs. Optimizing inventory costs plays an important role in reducing supply chain's costs and improving supply chain's competence. the paper considered the shortages and results of current literatures and proposed an amelioration inventory model by using the jointly managed inventory strategy.Because many literatures supposed that the demand can be added up, the paper proposed the hypothesis that the demand cannot be added up. And the hypotheses in many literatures are nonrepresentational and simple, so the paper proposed hypotheses more comprehensive, precise and actual, considering the uncertainty factors, lead time and stock-out costs of supplier and retailers. Basis on the series of hypotheses, the paper established inventory optimization models about the vendor, the retailers and the whole system and discussed the solution's range under several different conditions and the quantity of stock-out which influence the benefits of jointly managed inventory strategy. When the benefits of the whole system are improved but the benefit of one of them is declined, price discounts are used to redistribute the profit among vendors and retailers under the changeable final demand.Finally, the reasonableness of the established model is examined by a concrete example and the results are discussed in the paper. The modeling algorithm used Matlab software. The result shows that profit Pareto improvement between the vendor and the retailers can be realized through jointly managed inventory strategy and the appropriate redistribution method about benefits.