A comparison of coordinated supply chain inventory management systems

Abstract

Supply chain operations are widely used, as they have proven very effective in contemporary business environments. Traditional supply chain coordination has suffered from well-known bullwhip effects, which have been alleviated in part through greater information exchange from Efficient Consumer Response (ECR) and more coordinated systems such as Vendor-Managed Inventory (VMI). The refinements of VMI include Continuous Replenishment (CR) and Collaborative Planning, Forecasting and Replenishment (CPFR). This paper reviews the definitions of these variant supply chain inventory management systems. Simulation studies of VMI have studied the expected impact on supply chain operations. This paper evaluates the relative benefits and costs of alternative supply chain inventory systems and provides an analysis of the conditions for which coordinated inventory management systems are appropriate.