Managing Stocks in Supply Chains: Modeling and Issues

The paper presents a policy for inventory management in simple supply chains consisting of one buyer and a single vendor. The method is based on consignment stocks. A model is developed and a performance satisfaction indicator is introduced. In its development, the Consignment Stock model considers the uncertainty stemming from demand fluctuation and the unpredictability of lead times. Experiments were conducted to compare the performance of the Consignment Stock policy to some of those existing in literature.