An Inventory Model for Deteriorating Items Using Vendor-Managed InventoryPolicy

In recent researches, vendor managed inventory (VMI) policy is rarely considered in the case ofdeteriorating items. This study considers the supply chain partner’s collaboration via a VMI systemand provides an EOQ model for a two-level supply chain (single supplier-single retailer) with stockdependentdemand and constant deterioration and backlogging rates, to examine the inventorymanagement proceedings for VMI and non-VMI supply chains. The equations are simplified using anew approach in modeling. A comparison between the costs of two mentioned cases is done. Theresults of analytical examination of inventory costs with and without VMI show that VMI system inour proposed model always has the ability to reduce total costs of the supply chain and is always betterthan the traditional one. Some numerical examples and sensitivity analysis are also given to illustratethe application of the proposed model