Abstract Based on VMI, the supplier bearing the cost of RFID technology can improve supply chain players’ profit. An effectively coordination of profit will stimulate suppliers to use RFID technology. This paper studies the effect of leadtime compression on profit of supply chain players on the assumption that the market demand forecast error varies with leadtime based on VMI. Using a Newsvendor model, we discuss the constraint condition of RFID technology cost that can improve the profit of supply chain. After supplier using wholesale price coordinate strategy or retailer using linear transfer payment coefficient strategy can achieve Pareto improvement of the supply chain actors’ profits. Finally, the conclusion is validated through a numerical example.i
2013, Vol. 10 
