Vendor Managed Inventory (VMI) in micro, small and medium enterprises (MSMEs) – Plantain agricultural-chain

Abstract

This paper emerges as a research result of the Vendor Managed Inventory (VMI) issue to a dehydrated plantain productive chain, which is composed by a dehydrating plant (supplier) and a pig-raise farm (client), adding the product transport cost as an integral parameter to inventory cost, in order to examine the inventory process practice before and after establishing VMI. Initially a chain contextualization in the field sector and the Colombian plantain agro-industry is shown. Then, the inventory coordination model is formulated taking as reference the model proposed by Yao, et al. [1], which is based on the model of economic batch supplier order. According to the previous information, the mathematical model is then applied with VMI and without VMI, after that, the product transport cost is incorporated to the total cost of management inventory. The result shows that VMI adoption generates savings for the integrated chain and how the transport cost becomes a relevant individual element in the structure for logistics cost of the analyzed chain.

Keywords

• supply chain integration
• logistics cost
• coordination
• plantain agro-chain
• vendor managed inventory