Vendor Managed Inventory

Vendor-managed Inventory (VMI) is a system that improves the supply chain performance by making the manufacturer become responsible for the distributor’s inventory levels. The manufacturer receives electronic data (giving them access to every item the distributor provides along with true point of sale data) of the distributor’s inventory that indicates the distributor’s sales and stock levels. VMI allows the manufacturer to generate and provide the order, rather than the distributor.

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