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Cost Analysis and Earning Allocation for Jointly Managed Inventory Based on One Supplier and Many Producers

Xiaojuan Sheng, Xinzhong Bao, Zhe Wang


Jointly managed inventory (JMI) model is increasingly used in business practice. In the inventory management model for single-vendor vs. multi-retailer supply chains, how much cost reduction does JMI model in the supply chain has brought compared to the traditional model? And how to allocate the JMI inventory costs among the companies in supply chain. Firstly, this study analyzed the traditional supply chain inventory and joint inventory cost model for single-vendor and multi-retailer based on EOQ model. A systematic cost analysis model is put forward to compare the inventory cost under traditional inventory management and JMI. Secondly, regarding the cost reduction as the earning of JMI, an earning allocation mechanism is established. Unlike the traditional Shapley value method, a comprehensive fuzzy evaluation method is used to treat the importance factor, therefore lead to a more rational earning allocation result. Finally, an example proves that JMI reduces the total inventory cost, and the improved Shapley value method could be used to allocate the earning of JMI effectively.


jointly managed inventory, cost savings, earning allocation, shapely value method.

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