Modelling an industrial strategy for inventory management in supply chains: The 'Consignment Stock' case

Abstract

Stock control in Supply Chain management is of concern here, particularly an industrial practice observed in the automotive manufacturing context and defined as 'Consignment Stock' (CS). To understand the potentiality of CS policy, an analytical modelling is offered that refers to the problem of a single-vendor and single-buyer productive situation. A comparison with the optimal solution available in the literature is also shown. The conclusion proposes a method that is useful in identifying those productive situations where CS might be implemented successfully. Results show how CS policy might be a strategic and profitable approach to stock management in uncertain environments, i.e. where delivery lead times or market demand vary over time.