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Supply Chain Management Professional (SCMP) · Question

What is the primary objective of 'vendor managed inventory' (VMI)?

VMI empowers the supplier to take responsibility for maintaining an agreed-upon inventory level at the buyer's site, reducing stockouts and carrying costs for t

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Question: What is the primary objective of 'vendor managed inventory' (VMI)?

Answer options: ✅ To allow the supplier to manage inventory levels at the buyer's location.

  • To enable the buyer to manage inventory across all supplier locations.
  • To optimize transportation routes for incoming goods.
  • To minimize lead times for raw material procurement.

Correct answer: To allow the supplier to manage inventory levels at the buyer's location.

Explanation: VMI empowers the supplier to take responsibility for maintaining an agreed-upon inventory level at the buyer's site, reducing stockouts and carrying costs for the buyer.

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