Supply Chain Management Professional (SCMP) · Question
What is the primary role of a 'consignment inventory' agreement?
In consignment, the supplier owns the goods until the buyer sells or uses them, deferring the buyer's capital outlay for inventory.
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Question: What is the primary role of a 'consignment inventory' agreement?
Answer options: ✅ The supplier retains ownership of inventory until it is used or sold by the buyer
- The buyer takes ownership of inventory upon receipt but defers payment
- Both parties jointly own the inventory to share risk
- The inventory is stored off-site by a 3PL provider
Correct answer: The supplier retains ownership of inventory until it is used or sold by the buyer
Explanation: In consignment, the supplier owns the goods until the buyer sells or uses them, deferring the buyer's capital outlay for inventory.
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