On Measuring Supplier Performance Under Vendor-Managed-Inventory Programs In Capacitated Supply Chains
- Topics:
- Inventory Management
- Tags:
- Channel Management,
- Enterprise Software,
- Manufacturer,
- Marketing,
- Service Level,
- Software,
- Supplier,
- Supply Chain,
- Supply Chain Management (SCM)
- Source:
- INFORMS
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Overview: As widely accepted performance measures in supply chain management practice, frequency-based service levels such as fill rate and stockout rate are often considered in supply contracts under Vendor-Managed-Inventory (VMI) programs. Using a decentralized two-party capacitated supply chain model consisting of one manufacturer and one supplier in a VMI environment, the authors demonstrate that supplier's service level is in general insufficient for the manufacturer to warrant the desired service level at the customer end. The method by which the supplier achieves her service level to the manufacturer also affects customer service level. The findings have direct implications to supply chain metrics in general: The local service levels are insufficient measures to guarantee the system wide performance.
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Format: PDF | Size: 220KB | Date: Apr 2003 | Pages: 20
