What is a vendor-managed inventory (VMI) system primarily responsible for?

What is a vendor-managed inventory (VMI) system primarily responsible for?

• A. Delaying shipments
• B. Managing inventory levels at the customer's location
• C. Predicting market demand
• D. Replacing traditional storage methods

Answer: (B)

A vendor-managed inventory (VMI) system is primarily responsible for managing inventory levels at the customer's location. In a VMI system, the vendor, or supplier, takes responsibility for maintaining the inventory of their products at the customer's site. This involves monitoring inventory levels, placing orders as necessary, and ensuring that the customer has the right amount of stock on hand to meet demand. This approach allows for more efficient inventory management, as the vendor typically has better visibility and insights into product usage patterns and demand fluctuations. By delegating the inventory management task to the vendor, customers can reduce stockouts, minimize excess inventory, and improve overall supply chain efficiency. While elements such as delaying shipments, predicting market demand, and methods of storage may pertain to inventory management, they do not capture the primary function of a VMI system, which is specifically about managing and optimizing inventory levels at the customer's location to enhance service levels and operational efficiency.

A vendor-managed inventory (VMI) system is primarily responsible for managing inventory levels at the customer's location. In a VMI system, the vendor, or supplier, takes responsibility for maintaining the inventory of their products at the customer's site. This involves monitoring inventory levels, placing orders as necessary, and ensuring that the customer has the right amount of stock on hand to meet demand.

This approach allows for more efficient inventory management, as the vendor typically has better visibility and insights into product usage patterns and demand fluctuations. By delegating the inventory management task to the vendor, customers can reduce stockouts, minimize excess inventory, and improve overall supply chain efficiency.

While elements such as delaying shipments, predicting market demand, and methods of storage may pertain to inventory management, they do not capture the primary function of a VMI system, which is specifically about managing and optimizing inventory levels at the customer's location to enhance service levels and operational efficiency.