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On the benefits of CPFR and VMI: A comparative simulation study


  • Sari, Kazim


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.

Suggested Citation

  • Sari, Kazim, 2008. "On the benefits of CPFR and VMI: A comparative simulation study," International Journal of Production Economics, Elsevier, vol. 113(2), pages 575-586, June.
  • Handle: RePEc:eee:proeco:v:113:y:2008:i:2:p:575-586

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    References listed on IDEAS

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    Cited by:

    1. Ryu, Kwangyeol & Moon, Ilkyeong & Oh, Seungjin & Jung, Mooyoung, 2013. "A fractal echelon approach for inventory management in supply chain networks," International Journal of Production Economics, Elsevier, vol. 143(2), pages 316-326.
    2. Lyu, JrJung & Ding, Jyh-Hong & Chen, Ping-Shun, 2010. "Coordinating replenishment mechanisms in supply chain: From the collaborative supplier and store-level retailer perspective," International Journal of Production Economics, Elsevier, vol. 123(1), pages 221-234, January.
    3. Lee, Jun-Yeon & Ren, Louie, 2011. "Vendor-managed inventory in a global environment with exchange rate uncertainty," International Journal of Production Economics, Elsevier, vol. 130(2), pages 169-174, April.
    4. Yu, Haiyan & Tang, Linglang & Xu, Yinfeng & Wang, Yong, 2015. "How much does VMI better than RMI in a global environment?," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 268-274.
    5. Ramanathan, Usha, 2013. "Aligning supply chain collaboration using Analytic Hierarchy Process," Omega, Elsevier, vol. 41(2), pages 431-440.
    6. Parsa, Payam & Rossetti, Manuel D. & Zhang, Shengfan & Pohl, Edward A., 2017. "Quantifying the benefits of continuous replenishment program for partner evaluation," International Journal of Production Economics, Elsevier, vol. 187(C), pages 229-245.
    7. Sari, Kazim, 2010. "Exploring the impacts of radio frequency identification (RFID) technology on supply chain performance," European Journal of Operational Research, Elsevier, vol. 207(1), pages 174-183, November.
    8. Rad, Reza Hosseini & Razmi, Jafar & Sangari, Mohamad Sadegh & Ebrahimi, Zahra Fallah, 2014. "Optimizing an integrated vendor-managed inventory system for a single-vendor two-buyer supply chain with determining weighting factor for vendor׳s ordering cost," International Journal of Production Economics, Elsevier, vol. 153(C), pages 295-308.
    9. Ramanathan, Usha & Muyldermans, Luc, 2010. "Identifying demand factors for promotional planning and forecasting: A case of a soft drink company in the UK," International Journal of Production Economics, Elsevier, vol. 128(2), pages 538-545, December.
    10. Ramanathan, Usha & Gunasekaran, Angappa, 2014. "Supply chain collaboration: Impact of success in long-term partnerships," International Journal of Production Economics, Elsevier, vol. 147(PB), pages 252-259.
    11. Govindan, Kannan, 2015. "The optimal replenishment policy for time-varying stochastic demand under vendor managed inventory," European Journal of Operational Research, Elsevier, vol. 242(2), pages 402-423.
    12. Eksoz, Can & Mansouri, S. Afshin & Bourlakis, Michael, 2014. "Collaborative forecasting in the food supply chain: A conceptual framework," International Journal of Production Economics, Elsevier, vol. 158(C), pages 120-135.
    13. repec:ine:journl:v:28:y:2009:i:37:p:54-71 is not listed on IDEAS
    14. Mateen, Arqum & Chatterjee, Ashis K, 2015. "Analysis of Replenishment Policy Options in VMI Systems with Emission Related Cost," Working papers 186, Indian Institute of Management Kozhikode.
    15. Mateen, Arqum & Chatterjee, Ashis K, 2015. "Vendor Managed Inventory System with Emission Related Costs," Working papers 185, Indian Institute of Management Kozhikode.
    16. Choudhary, Devendra & Shankar, Ravi, 2015. "The value of VMI beyond information sharing in a single supplier multiple retailers supply chain under a non-stationary (Rn, Sn) policy," Omega, Elsevier, vol. 51(C), pages 59-70.

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