JOINTLY MANAGED INVENTORY MODEL AND IMPLEMENT ANALYSIS

Abstract

Supply Chain Management has been defined as a “set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements” [ 13. Applying an advanced information technology, SCM leads to share much information, such as demand forecasting, inventory planning and production planning. However, it is hard to share information among the companies requires for SCM because the cooperation between the companies, which is the minimum composition unit of a supply chain, is inadequate. As the development of SCM, many problems need to be solved, especially the problem of inventory. Inventory management in supply chain involves not only requirement forecasting and replenishment but optimization of customer service and profit. It covers evaluation of inventory strategies, lead time and changes of transportation with business modeling technology, considering effect from enterprises in supply chain while deciding economic variables, determining the right service level according to inventory status. There are four inventory management models that use different management agents: traditional model, Vendor Managed Inventory (VMI), Jointly Managed Inventory (MI) and Collaborative Planning Forecasting & Replenishment (CPFR). In this paper, we discuss characters of the Jointly Managed Inventory and its implement base on case study of Shanghai Tobacco CORP.