The use of consignment reduces the average amount of inventory a buyer owns as well as improves velocity.

Question

Quizplus · Accepted Answer

Consignment allows the buyer to only pay for the inventory that is sold, thereby reducing the average amount of inventory they own. Additionally, because the supplier retains ownership and control of the inventory until it is sold, they can more quickly and efficiently replenish and restock, improving inventory velocity.

The Use of Consignment Reduces the Average Amount of Inventory