Research on Profit Allocation Model of JMI under the Supply Chain Circumstance

With the development of Supply Chain Management (SCM), Enterprises are attaching importance to the management of supply chain cost, especially the inventory cost. In this paper, it mainly research on the strategy of Jointly Managed Inventory (JMI) based on supply chain. JMI can achieve synchronization operation of supply chain and greatly reduce its total cost. JMI shows the domination in cost saving. However, it is another issue on how to allocate the cost saving to achieve win-win for three distribution partners. A profit allocation model based on Shapley value is set up by using Analytic Hierarchy Process (AHP) and applying reasonable profit distribution weight according to channel power theory to solve that. The model considers comprehensively some uncertain factors, such as contribution, investment resources, actual risk to supply chain profit for every partner etc. In this paper, it verifies that model is more reasonable than traditional computational methods through a case, and it is worth promoting and reference for this method.