Hello,
Vendor hierarchy can be fully implemented in IS Retail. It is a part of SAP ERP under MM module.
In order to know whether your system is retail, execute transaction SFW5 (Switch Framework) and verify switch for Enterprise Extension EA-RET (Retail). It should be switched on.
Vendor Hierarchy is used mainly for reporting, setting up conditions and rebate agreements at hierarchy level.
Thanks,
Venu