Study on the collapse of the alliance base on VMI condition

In theory, the whole inventory cost on the supply chain can be reduced greatly by use of vendor managed inventory strategy. However, there is a great disparity in strength among the members on the supply chain, the weak member can be oppressed usually. It is hard for the weak member to get benefit, which lead him to exit from the alliance. Finally the supply chain is unstable. In this article, the factors which make the supply chain unstable are analyzed and some measure is put forward accordingly.