Vendor Managed Inventory - What is vendor managed inventory in supply chain?

Q: What is vendor managed inventory in supply chain?

Vendor-managed inventory (VMI) is an inventory management practice in which a supplier of goods, usually the manufacturer, is responsible for optimising the inventory held by a distributor. ... Thus, the vendor is responsible for the retailer's ordering cost, while the retailer has to pay for their own holding cost.

Answer

In vendor-managed inventory (VMI), the manufacturer or other provider of products is tasked with ensuring that the distributor's inventory is optimized. So, while the retailer is on the hook for their own holding costs, the vendor is liable for the cost of ordering.

Vendor Managed Inventory - What is vendor managed inventory in supply chain?

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