The Global Supply Chain Forum (Stanford Global Supply Chain Forum Web Resource, http://www.stanford.edu/groups/scforum) defines supply chain management (SCM) as “Supply chain management is the integration of key business processes from end user through original suppliers that provides products, services and information that add value for customer and other stakeholders.” The rapid development of the Internet has dramatically changed the traditional definitions of manufacturer, suppliers and customers. Newer approaches to supply chain management attempt to organize the supply chain as a network of cooperating intelligent agents, each performing one or more supply chain functions and each coordinating actions with one another.

This research is aimed at creating a viable model of a single manufacturer single supplier collaborative supply chain system using a Vendor Managed Inventory (VMI) system. The research further uses known inventory performance parameters to performance benchmark the VMI system with traditional push-pull systems, develop a collaborative forecasting spreadsheet solution and a best alternative ordering policy amongst EOQ, Monthly, JIT and VMI policies under known lead time and a variety of demand distribution functions.