Modelling and empirical analysis of the VMI-3PL system of cloud service platform in industry supply chain
by Zixia Chen; Zelin Chen; Yujie Geng
International Journal of Computing Science and Mathematics (IJCSM), Vol. 15, No. 1, 2022

Abstract: The cloud service platform of industrial supply chain gathers chain-enterprises such as manufacturers, retailers, logistics service providers and customers, among which vendor managed inventory (VMI) warehousing hosting is a core function of the service platform. Based on the comprehensive analysis of the manufacturer's optimal production strategy and inventory strategy of raw materials and products, the paper constructed the VMI-3PL supply chain system model that is composed of "single manufacturer, single logistics service provider and multiple retailers" under specific constraints for the first time. Furthermore, the paper emphasises the influence on the cost of industrial supply chain of several parameter such as the production demand ratio of the manufacturer, the inventory holding cost and order fixed cost of the third-party logistics service provider. Empirical analysis shows that VMI-3PL supply chain system can avoid high inventory cost of manufacturers, thereby effectively reducing the average ordering cost of retailers and the average total cost of supply chain.

Online publication date: Mon, 11-Apr-2022

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