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Beyond EDI: Impact of Continuous Replenishment Program (CRP) Between a Manufacturer and Its Retailers

Management Science and Information Systems Department, School of Management, University of Texas at Dallas, Richardson, Texas 75083
Applied Statistics and Operations Research Department, Bowling Green State University, Bowling Green, Ohio 43403
sraghu{at}utdallas.edu
yau_yeh{at}yahoo.com

Electronic data interchange (EDI), used traditionally to exchange business documents, has recently been extended to facilitate interorganizational collaborative processes such as the continuous replenishment program (CRP). The key characteristics of CRP are the sharing of real-time inventory data by retailers with manufacturers and continuous replenishment of retailer inventory by manufacturers. Prior research on EDI has focused on the transaction efficiency of EDI. We analyze the impact of information sharing and continuous replenishment in the CRP context and study the factors that affect the value of CRP. The study quantifies the value derived from CRP and the optimal number of retailers a manufacturer should partner with.

Key Words: Electronic Data Interchange; Continuous Replenishment Program; Supply Chain Partnerships; Interorganizational Systems; IT Justification
History: This paper was received on September 30, 1999.

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