Asked by Victoria Rodriguez on May 11, 2024
Verified
What is vendor-managed inventory (VMI)?
Vendor-Managed Inventory
Vendor-Managed Inventory is a supply chain initiative where the supplier assumes the responsibility for managing their products' inventory levels at the customer's premises.
- Gain an understanding of Vendor-Managed Inventory (VMI) and its benefits.
Verified Answer
DL
Denise LaRueMay 16, 2024
Final Answer :
Essentially, vendor-managed inventory (VMI) usually means that the manufacturer will manage the inventory of its products (and possibly related products) at the retailer's warehouse(s) and reorder as appropriate for customer fulfillment. The manufacturer may also have a representative at the designated retail warehouse locations to assure accurate and timely delivery. The retailer should experience lower costs associated with inbound logistics, and the manufacturer should be able to offset its additional cost with increased sales (fewer stockouts, more complete orders, etc.) because of the more accurate and timely information of product orders at the store level.
Learning Objectives
- Gain an understanding of Vendor-Managed Inventory (VMI) and its benefits.
Related questions
Dollar General Switches to VMI for Two Different Producers of ...
Define and Briefly Discuss the ABC, EOQ, Materials Requirements Planning ...
The ________ Method of Assigning Costs to Inventory and Cost ...
The Cost of an Inventory Item Includes the ________,Plus ________ ...
Goods That Are Partially Completed by a Manufacturer Are ...