Modeling a Coordinated Manufacturer–Buyer Single-Item System Under Vendor-Managed Inventory

  • Fidel TorresEmail author
  • Frank Ballesteros
  • Marcela Villa
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 197)


This work develops a new coordinated manufacturer–buyer model for a single item in a vendor-managed inventory (VMI) context. The proposed model includes the manufacturing uptime and a manufacturer–buyer synchronization scheme. This mechanism makes logistical coordination between manufacturer and buyer much easier. The analysis of the mathematical model of coordination considers production and demand rates, as well as totals of the manufacturer and the buyer’s ordering and holding inventory costs. This study is complemented by a sensitivity analysis. It focuses on the effects of parameter variations on proposed performance measurements in the manufacturer–buyer VMI-coordinated scheme. Finally, analytical conditions under which the suggested coordinated implementation of VMI gives benefits to both manufacturer and buyer and to the supply chain are deduced and verified. Results show that it is possible for both the manufacturer and buyer to obtain profits in VMI implementation by selecting satisfactory parameter combinations using our proposed coordination scheme in a win–win relationship.


Vendor-managed inventory Supply chain integration Information sharing  Coordination 



The authors would like to thank to the anonymous referee and to the editor for their valuable comments.


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Fidel Torres
    • 1
    Email author
  • Frank Ballesteros
    • 1
  • Marcela Villa
    • 2
  1. 1.Department of Industrial EngineeringUniversidad de los AndesBogotáColombia
  2. 2.School of Industrial EngineeringUniversidad Pontificia BolivarianaBucaramangaColombia

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