Vendor-Managed Inventory Practice in the Supermarket Supply Chain

Vendor-managed inventory (VMI) is an important coordination mechanism in supply chain management where decisions about timing and level of customer’s replenishment are determined not by the customer but by the supplier. The article is motived by real applications arising in the food engineering field. Specifically, a VMI strategy is applied to a logistic system in the supermarket supply chain. Such system comprises a distribution center and several retail outlets. An effective heuristic method for tackling the inventory-routing problem related to the coordination mechanism is discussed and numerical results are presented.