By inducing the typical inventory control problem - the bullwhip effect, this paper presents vendor managed inventory (VMI) control methods on the basis of traditional methods of inventory management methods, constructs a VMI mathematics model, and analyzes the influence of VMI on inventory cost and channel profit. Finally, a special case is studied to verify that VMI is an effective supply chain strategy that can not only increase channel profit of supplier and customer but also improve full channel coordination, thereby reducing the bullwhip effect.
To solve the problem of a supplier＇s failure to deliver thus impacting supply chain system performance in the supply chain operating process, a model of supplier selection and order splitting in the context of a multiple sourcing setting is proposed. First, by the analysis of the elements of expected total costs of the buyer firm, namely, expected loss costs, resilience effort costs, supplier maintenance costs, and cycle purchase costs, the expected total costs function is obtained. And then, the effects of supplier characters on the supplier selection and order splitting decisionmaking are investigated by numerical examples. The results show that the maximum delivery capacity, the probability of failure to deliver and the resilience parameters are crucial elements in determining which suppliers should be selected and how to do order splitting between suppliers. Finally, current analyses focus only on the expected total costs of the buyer firm but ignore the suppliers＇ costs： thus, it is more interesting to examine the supplier decisions from both parties＇ points of view.
