VMI is abbreviation of Vendor Managed Inventory. Vendor managed inventory is
an integrated approach for retailer–vendor coordination (Darwish & Odah, 2010). It
allows both users and suppliers to get the lowest cost. Sarmah et al. (2006) presented
that vendor decides the appropriate inventory levels within contractual agreement
between vendor and retailers. A common agreement by the VMI is continue to
oversee the implementation of the agreement and amendments to the content of the
agreement (Waller et.al., 1999). The VMI is contrary to the traditional inventory
management mode. VMI integrates the supply chain management model, and adapts
to changing market requirements (Achabal et al., 2000). VMI's role in the distribution
chain is very important, so more and more people pay attention to it (Cetinkaya and
Lee, 2000). VMI has been continuously improved.