Abstract: In ovder to analyze the effect of operation mode of supply chain on supply chain performance under random yield and uncertain demand, supply chain collaborative models under manufacture-owned-inventory (MOI) and vendor-managed-inventory (VMI) are studied, which consist of two suppliers-one manufacturer assembly system. A collaborative model based on supply risk sharing is proposed under MOI, where the manufacturer is fully responsible for inventory decision and held inventory of components. Another collaborative model based on revenue sharing and additional penalty on critical supplier is proposed under VMI, where suppliers are fully responsible for the production and inventory decisions and held inventory. Optimal lot sizing under centralized decision, MOI and VMI are analyzed, and Nash equilibrium is proved to exist under VMI. Results also show that VMI is much easier to coordinate supply chain than MOI, and is more effective to reduce the effect of random yield and uncertain demand on supply chain performance. Supply chain can achieve Pareto improvements under MOI, but can not be coordinated. However, when parameters satisfy certain relationship, the expected profit under VMI can reach the profit of the centralized decision.

Key words: random yield, uncertain demand, MOI, VMI, coordinated model