Study on Win-win Conditions of All Participants under VMI Mode of Upstream Lay

Two typical application lays of VMI mode are introduced, and the VMI mode of upstream lay is addressed to research on. In case of the indefinite demand, economic effects of every node in both traditional mode and VMI mode are compared by setting up mathematic models and using simulation skills. Basing on the above analyses, the paper tries to find a rational space of supplier´s sales price which can enhance both supplier and manufacture´s benefit base on the stable sales price of manufacture when the VMI strategy is conducted, and give a theory gist for a longer cooperation of every enterprise.