Read article attached concerning vendor-managed inventory (VMI).
Is VMI just a stop gap measure or will it last when demand returns?© BrainMass Inc. brainmass.com June 4, 2020, 12:56 am ad1c9bdddf
Is VMI just a stop gap measure or will it last when demand returns?
The vendor managed inventory is a stop gap measure and will not last when the demand returns. There are several reasons for this contention. The vendor managed inventory is system in which the supplier takes responsibility for maintaining inventory. Usually, this inventory is kept in a store and the retailer hopes to derive several advantages from this arrangement. The retailer hopes that there will not be stock-outs because the inventory has been managed by the supplier. Further, the vendor usually takes care of display and trains the store staff to handle the inventory properly. The store expects that since the vendor manages the inventory, in some cases the inventory should be owned by the vendor. The risk is divided between the store and the vendor. In some cases there are agreements that if a product is not sold for some ...
Managing Logistics Operations is discussed very comprehensively in this explanation..