On the benefits of CPFR and VMI: A comparative simulation study
This paper aims to help managers of a supply chain to determine an appropriate level of collaboration according to their specific business conditions. For this purpose, a comprehensive simulation model representing two popular supply chain initiatives, that are collaborative planning, forecasting and replenishment (CPFR) and vendor-managed inventory (VMI), is constructed. In addition, a traditionally managed supply chain (TSS) is also included in the model as a benchmark. The results indicate that benefits of CPFR are always higher than VMI. However, we also realize that under certain conditions, the gap between the performances of CPFR and VMI does not rationalize the additional resources required for CPFR. Especially, when the lead time is short and/or when available manufacturing capacity is tight, a careful consideration has to be given on the selection of an appropriate collaboration mode.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrew J. Clark & Herbert Scarf, 1960.
"Optimal Policies for a Multi-Echelon Inventory Problem,"
INFORMS, vol. 6(4), pages 475-490, July.
- Andrew J. Clark & Herbert Scarf, 2004. "Optimal Policies for a Multi-Echelon Inventory Problem," Management Science, INFORMS, vol. 50(12_supple), pages 1782-1790, December.
- Yossi Aviv, 2007. "On the Benefits of Collaborative Forecasting Partnerships Between Retailers and Manufacturers," Management Science, INFORMS, vol. 53(5), pages 777-794, May.
- Srinagesh Gavirneni & Roman Kapuscinski & Sridhar Tayur, 1999. "Value of Information in Capacitated Supply Chains," Management Science, INFORMS, vol. 45(1), pages 16-24, January.
- Disney, S. M. & Towill, D. R., 2003. "The effect of vendor managed inventory (VMI) dynamics on the Bullwhip Effect in supply chains," International Journal of Production Economics, Elsevier, vol. 85(2), pages 199-215, August.
- Lee, Ching Chyi & Chu, Wai Hung Julius, 2005. "Who should control inventory in a supply chain?," European Journal of Operational Research, Elsevier, vol. 164(1), pages 158-172, July.
- Zhao, Xiande & Xie, Jinxing & Leung, Janny, 2002. "The impact of forecasting model selection on the value of information sharing in a supply chain," European Journal of Operational Research, Elsevier, vol. 142(2), pages 321-344, October.
- Birendra K. Mishra & Srinivasan Raghunathan, 2004. "Retailer- vs. Vendor-Managed Inventory and Brand Competition," Management Science, INFORMS, vol. 50(4), pages 445-457, April.
- Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
- Sven Axsäter & Kaj Rosling, 1993. "Notes: Installation vs. Echelon Stock Policies for Multilevel Inventory Control," Management Science, INFORMS, vol. 39(10), pages 1274-1280, October.
- Srinagesh Gavirneni, 2002. "Information Flows in Capacitated Supply Chains with Fixed Ordering Costs," Management Science, INFORMS, vol. 48(5), pages 644-651, May.
- Dong, Yan & Xu, Kefeng, 2002. "A supply chain model of vendor managed inventory," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(2), pages 75-95, April.
- Yossi Aviv, 2001. "The Effect of Collaborative Forecasting on Supply Chain Performance," Management Science, INFORMS, vol. 47(10), pages 1326-1343, October.
- De Toni, Alberto Felice & Zamolo, Elena, 2005. "From a traditional replenishment system to vendor-managed inventory: A case study from the household electrical appliances sector," International Journal of Production Economics, Elsevier, vol. 96(1), pages 63-79, April.
- Dejonckheere, J. & Disney, S. M. & Lambrecht, M. R. & Towill, D. R., 2004. "The impact of information enrichment on the Bullwhip effect in supply chains: A control engineering perspective," European Journal of Operational Research, Elsevier, vol. 153(3), pages 727-750, March.
- Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
- Disney, S. M. & Naim, M. M. & Potter, A., 2004. "Assessing the impact of e-business on supply chain dynamics," International Journal of Production Economics, Elsevier, vol. 89(2), pages 109-118, May.
- Kevin H. Shang & Jing-Sheng Song, 2003. "Newsvendor Bounds and Heuristic for Optimal Policies in Serial Supply Chains," Management Science, INFORMS, vol. 49(5), pages 618-638, May.
- Yossi Aviv, 2002. "Gaining Benefits from Joint Forecasting and Replenishment Processes: The Case of Auto-Correlated Demand," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 55-74, December.
- Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
- Frank Chen & Zvi Drezner & Jennifer K. Ryan & David Simchi-Levi, 2000. "Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information," Management Science, INFORMS, vol. 46(3), pages 436-443, March.
When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:113:y:2008:i:2:p:575-586. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.