The Inventory Benefit of Shipment Coordination and Stock Rebalancing in a Supply Chain

Ki Ling Cheung · Hau L. Lee

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Supply Chain and Inventory Management Sustainable Supply Chain Management Logistics and Transportation Systems

Abstract

In this paper, we examine two information-based supply-chain efforts that are often linked to Vendor-Managed Inventory (VMI) programs. Specifically, we consider a supplier serving multiple retailers located in a close proximity. The first effort uses information on the retailers' inventory positions to coordinate shipments from the supplier to enjoy economies of scale in shipments, such as full truckloads.The second effort uses the same information for eventual unloading of the shipments to the retailers to rebalance their stocking positions. How much benefit do we gain from such initiatives? What are the relative benefits of the two initiatives? What are the drivers of such benefits? This paper seeks answers to these questions.

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References

1999Inventory management and production planning and scheduling 2000The Value of Information Sharing in a Two-Level Supply Chain 2000Supply Chain Inventory Management and the Value of Shared Information 1999Value of Information in Capacitated Supply Chains 2000Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems 1981Multi-level production/inventory control systems : theory and practice

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