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Cost Model and Profit Sharing of Jointly Managed Inventory between Vendor and Retailer

XiaoJuan Sheng, Zhe Wang

Abstract


Jointly managed inventory (JMI) is an effective way to improve supply-chain management. Firstly, the inventory cost models under traditional supply mode and JMI are discussed, which shows that JMI is a very useful method to reduce the total supply-chain inventory cost. Then, a profit sharing system is designed to allocate the cost-saving between vendor and retailer based on Rubinstein bargaining model. And fuzzy judgement method is used to evaluate the patience coefficient for vendor and retailer in the game process of profit sharing. Finally, a case is used to prove that JMI has practical effect for inventory cost saving, and also to testify that Rubinstein bargaining model is feasible in JMI profit sharing.

Keywords


Jointly Managed Inventory, Supply-chain Inventory Cost, Profit Sharing, Fuzzy Judgment.

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