In small and medium-sized enterprises (SMEs), resources and knowledge bases are usually strongly restricted. Therefore, it is of particular importance for these companies to be able to select and utilize only the most critical performance indicators. This could point towards a focused approach to performance measurement such as, for example, advocated in quick response manufacturing (QRM). Results from a recently conducted empirical survey of SMEs in northern Denmark are used to illustrate the present focus of performance measurement in these companies.

We develop an integrated vendor-buyer model for a two-stage supply chain. The vendor manufactures the product and delivers it in a number of equal-sized batches to the buyer. The items delivered are presented to the end customers in a display area. Demand is assumed to be positively dependent on the amount of items displayed. The objective is to maximize total supply chain profit. The numerical analysis shows that buyer-vendor coordination is more profitable in situations when demand is more stock dependent. It also shows that the effect of double marginalization provides a link between the non-coordinated and the coordinated case.

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