At the other end of the supply chain, the 3PL provider can also coordinate the transportation schedule of its outbound logistics with the inventory levels at the retailers. This is similar to Vendor Managed Inventory (VMI) or Continuous Replenishment Program (CRP), except that the 3PL provider acts on behalf of the supplier. Again, the main success factor in VMI is in sharing of information,
including sharing of point-of-sales data and inventory level information. Papers on VMI include Raghunathan and
Yeh [47] which studied the impact of information sharing on CRP and factors that affect the value of CRP, and also
quantified the value of CRP and determined the optimal number of retailers a manufacturer should work with; K.L.
Cheung and H.L. Lee [48] which focused on using information to coordinate shipment to achieve economies
of scale and to use information for stock rebalancing, and also compares the benefits derived from both; Cetinkaya
and Lee [49] which presented an analytical model to approximate the optimum replenishment quantity and dispatch frequency simultaneously; Axsater [50] in response to [49] provided a simple procedure to compute exactly and illustrated that the errors when using the model in [49] can be very large for certain problem types.
At the other end of the supply chain, the 3PL provider can also coordinate the transportation schedule of its outbound logistics with the inventory levels at the retailers. This is similar to Vendor Managed Inventory (VMI) or Continuous Replenishment Program (CRP), except that the 3PL provider acts on behalf of the supplier. Again, the main success factor in VMI is in sharing of information,
including sharing of point-of-sales data and inventory level information. Papers on VMI include Raghunathan and
Yeh [47] which studied the impact of information sharing on CRP and factors that affect the value of CRP, and also
quantified the value of CRP and determined the optimal number of retailers a manufacturer should work with; K.L.
Cheung and H.L. Lee [48] which focused on using information to coordinate shipment to achieve economies
of scale and to use information for stock rebalancing, and also compares the benefits derived from both; Cetinkaya
and Lee [49] which presented an analytical model to approximate the optimum replenishment quantity and dispatch frequency simultaneously; Axsater [50] in response to [49] provided a simple procedure to compute exactly and illustrated that the errors when using the model in [49] can be very large for certain problem types.
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