The supply hub inventory based on Supply Driven has been construed comparing to VMI mode. Firstly, Supply Driven was introduced. Then, risk pooling, which was similar to supply hub, was analyzed from every aspect. After matching was taken into account, a model was established in supply chain of one product with two different parts. Two supply policies were bought forward to analyzing. Essentially, we showed that the Out of Stock was reduced by supply hub under usual conditions. The holding cost and total cost of supply hub will be lower than VMI when the demand distribution is satisfied with some qualifications under different policies. © 2011 IEEE.
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