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ISSN : 1738-3110

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Early Access e-Submission

Vol.13 No.3

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How VMI and Consignment Jointly Affect Supply Chain Performance

The Journal of Distribution Science / The Journal of Distribution Science, (P)1738-3110; (E)2093-7717
2015, v.13 no.3, pp.31-39
https://doi.org/https://doi.org/10.15722/jds.13.3.201503.31
Ryu, Chung-Suk
Ryu,, C. (2015). How VMI and Consignment Jointly Affect Supply Chain Performance. The Journal of Distribution Science, 13(3), 31-39, https://doi.org/https://doi.org/10.15722/jds.13.3.201503.31

Abstract

Purpose - Due to its potential to improve supply chain operations, supply chain collaboration has attracted significant attention from both academics and practitioners. This study focuses on VMI, in collaboration with consignment, and examines its impact on supply chain performance. Research design, data, and methodology - This study employs the analysis of mathematical models, formulated based on the proposed supply chain framework. Using numerical examples, it evaluates the performance of three supply chain systems: one including VMI and consignment, a consignment-only system, and a traditional system. Results - The combination of VMI and consignment produces greater supply chain benefits than the consignment-only and traditional systems. Whereas only the performance of the buyer improves with the consignment-only system, the system with VMI and consignment is beneficial to both the buyer and supplier. Conclusions - The results of this study reveal that the inclusion of the additional collaborative function of VMI makes consignment a better supply chain collaboration program. Future studies should examine issues regarding the testing of diverse collaboration programs and the building of a firm theoretical background.

keywords
Supply Chain Management, Consignment, Vendor Managed Inventory, VMI with Consignment, Supply Chain Collaboration

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