Which one of the following statements is true about vendor-managed inventory (VMI)?
A)VMI is a form of outsourcing.
B)VMI often increases the bullwhip effect.
C)VMI is used only in responsive supply chains.
D)VMI is identical to contract manufacturing.

Question

Quizplus · Accepted Answer

Vendor-managed inventory (VMI) is a form of outsourcing in which the vendor takes responsibility for managing and replenishing inventory for the buyer. This allows the buyer to reduce inventory costs and improve supply chain efficiency. VMI is not identical to contract manufacturing and can be used in both responsive and efficient supply chains. While VMI can sometimes increase the bullwhip effect, it is not a necessary outcome of this inventory management approach.

Which One of the Following Statements Is True About Vendor-Managed