Consignment stocking policy models for supply chain systems: A critical review and comparative perspectives

Abstract

This paper studies the consignment stocking policy models for supply chain systems and categorizes different models from the view point of structural configuration of the systems, operational policies, component analyses, cost and profit measurements, and several other standard measures used in inventory management. A comprehensive survey of the models and their critical analyses are pursued here to understand the operational mechanics of different consignment policies that vary from product to product and system to system. The isolation mechanisms used for modeling are different types of supply systems, consignment types, operational mechanism, physical and/or geographical locations, and operational constraints, to name a few. The exercise performed here systematically identifies the appropriateness, and different advantages and disadvantages of the models. This study also examines different consignment models for determining manufacturing batch sizes, order quantity deliverable to the retailers, advertisement and price of the products, profits, independent and centralized operational policies for vendor and buyers, and optimizes many other system parameters and controllable operational variables. The review of the literature sheds different comparative perspectives of the models from practical point of applications and revelation of their theoretical underpinnings. The models have been examined from the managerial insights and several hints on applications of them have been indicated as appropriate in different locations. Several avenues for future research have also been pin-pointed to enrich this area of research on consignment policy.