Abstract:Considering the importance of supply management to assembly system,we model inventory games between suppliers in the setting of VMI policy and cost-sharing. This paper seeks to shed light on the impacts of such games on the less inventory and profit allocation in decentralized systems with information-isolating and information-sharing. The centralized system is demonstrated for comparison.Further,two strategies are presented for system performance improving. Our results show that: 1) In the case of information-isolating,the inaccurate guesses for less-inventory holder between the suppliers can lead to wrong decision making,thus damaging the expected profit of gamers.The degree of this damage relates to the suppliers’confidence.2) With the existence of Nash equilibrium guaranteed,information sharing and the modulation of the cost-sharing ratio can help improve the entire performance.This conclusion illustrates the possibility of information sharing between suppliers.3) If the penalty of the ordering delay is high,the inventory of two parts should be equal, otherwise,the inventory of two parts should be unequal.Hence,whether a decentralized system should be altered for symmetric system or unsymmetric system depends.