A supply chain is composed of one supplier, one third-party logistics(TPL) and two adjacent manufacturers. The
TPL implements vendor-managed inventory program for the supply chain, and the supplier manages the inventory of both
manufacturers by using a joint replenishment transshipment policy(??, ??,??), where ?? demonstrates the difference between
initial on hand inventory of manufacturers, and the transshipment is allowed when one of the manufactures is out of stock.
This paper first analyses and characterizes the whole system, and proposes an algorithm to solve the problem. Then, the
proposed policy is compared with the individual replenishment for each manufacturer by numerical examples. Finally, this
research investigates the influence of different parameter settings to the effect of the proposed policy.