VENDOR-MANAGED INVENTORY MODEL FOR SINGLE VENDOR AND MULTIPLE-RETAILERS WITH CONSIDERING THE MOVEMENT OF GOODS BETWEEN RETAILER'S WAREHOUSES

This paper studies the case of multiple retailers sourcing a product from a vendor. To reduce transportation and handling and shortage and ordering costs, the retailers have the option to assign to the vendor and other retailer. The vendor and retailers, chosen to distribute goods, deliver their batches jointly to the retailers. The paper shows that consolidating shipments may lead to a signicant reduction in total cost. Based on continuous review (r,Q) policy, this paper deals with contracts for vendor-managed inventory (VMI) program in a system comprising a single vendor and multiple retailers. Vendor-managed inventory is a well-known industry practice for supply chain collaboration. Vendormanaged inventory is a continuous approach to determining the quantity and timing of order dispatch to the retailersbythe-suppliers, whichisperformedperformed with the exchange of information between retailers and suppliers. The purpose of this paper is to obtain the optimal order of quantity and determine the retailers that can be selected as intermediaries for transferring goods to other retailers in such a way that minimizes transportation and handling and shortage and ordering costs. This work develops a new coordinated one supplier and multi-retailer model for a single item in a vendor-managed inventory context. In particular, the contractual agreement between the vendor and buyer is explicitly included. The proposed model developed a VMI by adding a provision allowing for the movement of goods between retailers. This mechanism makes logistical coordination between supplier and retailer much easier. Considering 30 retailers the proposed model was solved using LINGO and showning that the inventory and transportation costs, considering the movement of goods between the retailers will be reduced signicantly. Results show that it is possible for both vendors and retailers to obtain prots in VMI implementation by selecting satisfactory parameter combinations using our proposed coordination scheme in a win-win relationship. We also show that the proposed model reduced the inventory and transportation costs are great.