Vendor managed inventory in a two level supply chain: A case study of small Indian enterprise

Abstract

An effective supply chain management practice improves the profitability and responsiveness of organizations. Like multinationals, small-scale enterprises are also capitalizing this feat. This paper presents a case study of a two level supply chain setting. Here a small enterprise i.e. vendor manages the inventory of the retailer. Vendor develops the forecasts and a database for replenishment decisions. In this paper we have also compared various statistical methods of forecasting. We have also shown how effective vendor managed forecasts reduces bullwhip effect. The purpose of this paper is to probe the effect of these forecasts on inventory levels, inventory costs, lead-time and customer satisfaction index.

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