Amirhossein Nobil - Faculty of Management and Accounting, Parandak Institute of Higher Education, Parandak, Iran
Ali Gharaei - Department of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran

Vendor managed inventory is an advanced strategy in which responsibilities such as monitoring, planning, and direct replacement of goods are assigned to the vendor by the customer. Such a strategy is based on a close relationship between the vendor and customer and demands the establishment of a targeted flow of information. The outcome of this strategy is the reduction of costs and the increase in the service level for both parties (win-win strategy). In this article, we try to study how the vendor managed inventory system works and what is the role of the electronic data exchange system in its implementation, how to reduce costs and increase the service level, what obstacles and problems are posed during the implementation. Two case studies of the effects of vendor managed inventory in the steel and electrical equipment industries are addressed as well. Finally, the implementation results of these two case studies are described.

Vendor managed Inventory, Information Flow, Advanced Shipping Notice, electronic data interchange