A study of distributed inventory system based on VMI strategy under emergency conditions

Abstract

To find a more effective strategy of managing distributed inventory system under emergency conditions, we combine Vendor Managed Inventory (VMI) with a Hierarchical, Distributed, Dynamic, Inventory management (HDDI) scheme to manage distributed inventory system with decentralized control. Vendor Managed Inventory (VMI) strategy is introduced into a typical distributed inventory system with modified HDDI scheme to increase information sharing of the system. We use system dynamics to simulate the distributed inventory system with VMI and HDDI strategy under emergency conditions. It shows that the distributed inventory system based on VMI and modified HDDI strategy can meet emergency requirements and has lower inventory, compared with traditional inventory system. In addition, a buffer stock mechanism is used in discussed system to balance the contradiction between fill rate and cost under emergency conditions.