Supply Chain Coordination With Vendor-managed Inventory

The market competition is becoming fiercer and fiercer with economic development. And in order to win the competition, all the enterprises must discard the self-governed inventory and adopt the integrated mode to restrain the demand distortion and bullwhip effect. The VMI mode has emerged under this circumstance. However, VMI could not eliminate the double effect and maximize the profit of supply chain. Therefore, it’s very necessary to propose a contract which can restrict all parties and coordinate the supply chain.This dissertation dose a systematic study on supply chain cooperation and coordination under different situations such as’stochastic demand influenced by retailer’s promotion’,’Stackelberg mode leading by supplier and retailer’and’retailer act as a risk-aversion partner’As to the situation of’stochastic demand influenced by sales promotion’, this dissertation focuses on different demand types (additive demand and multiple demand) and different gaming modes (Stackelberg modes leading by supplier or retailer). Through setting the supply chain model consisting of one supplier and one retailer, we analyze the decisions made by both parties under both the centralized and decentralized supply chain. From the comparison we can find that the common contract cannot coordinate supply chain. Then we provide two new contracts which can improve the profit of each party to coordinate the supply chain. The feasibility of new contracts and conditions under which all parties will accept the contracts has also been provided.As to the special supply chain case with risk-aversion retailer, we set a supply chain with a risk-neutral supplier and risk-aversion retailer, and use the downside risk to measure the risks retailer faces. And we will find that the optimal decision of the risk-aversion retailer is lower than the one with risk-neutral retailer, and the coordinating contract under risk-neutral scenario can’t work under the risk-aversion scenario.