ICIS '97 Proceedings of the eighteenth international conference on Information systems
Research Report. Can Edi Benefit Adopters?
Information Systems Research
Coordinating Production and Delivery Under a (z, Z)-Type Vendor-Managed Inventory Contract
Manufacturing & Service Operations Management
Information Systems Research
Supply Chain Inventory Management and the Value of Shared Information
Management Science
Incentive Efficient Control of a Make-to-Stock Production System
Operations Research
Retailer- vs. Vendor-Managed Inventory and Brand Competition
Management Science
Manufacturer Benefits from Information Integration with Retail Customers
Management Science
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Supply chain integration in vendor-managed inventory
Decision Support Systems
Stockout Compensation: Joint Inventory and Price Optimization in Electronic Retailing
INFORMS Journal on Computing
Information Technology and Management
Analyzing of CPFR success factors using fuzzy cognitive maps in retail industry
Expert Systems with Applications: An International Journal
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We develop a mechanism under vendor-managed inventory (VMI) by which a manufacturer provides an incentive contract to a retailer to convert lost sales stockouts into backorders. An incentive contract is required since the retailer's efforts are not directly observable. We first show that when there are no limits on order quantities or inventory levels imposed on the manufacturer, the manufacturer will push inventory onto the retailer. The manufacturer minimizes the possibility for lost sales stockouts by maintaining high inventory levels at the retailer rather than by paying incentives to the retailer. However, modern information systems (IS), such as radio frequency identification (RFID), allow the retailer to monitor inventory at its premises and to enforce limits on order quantities. With strict limits on order quantities, the manufacturer will provide incentives to the retailer to convert lost sales stockouts to backorders. We analyze the conditions under which these incentive payments are likely to be highest.