Review of Research on Economic Effect and Profit Coordination Mechanism for VMI

Abstract

This paper attempts to give a systematic classification of the literature about the economic effect and profit coordination mechanism of Vendor Managed Inventory (VMI). Study finds that it have reached a consensus in many ideas, such as, VMI can improve the efficiency and reduce the costs of supply chain, there is conditional that participants win-win and so on. Study also finds the coordination mechanism of VMI has many forms, including the form based on price coordination and the form revenue sharing contract. Now research mainly focuses on the downstream supply chain (manufacturers and distributors or retailers), so the upstream segment (between the raw material supplier and manufacturer) of VMI will be a future worthy of a field of study, and the simulation technology based on Multi-Agent will be the future of mainstream research.