From the course: Inventory Management Foundations
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Vendor-managed inventory
From the course: Inventory Management Foundations
Vendor-managed inventory
- Sometimes the best way to manage your inventory is to let someone else do it for you. Wait a minute. If inventory management is so important to your success why in the world would you delegate this to someone else? Many companies today are doing just that by embracing vendor managed inventory. With VMI as it's best known the supplier manages the inventory for you. The supplier determines how much to order and when. You as the customer monitor and manage the supplier's decisions. The main advantage to VMI is that there is better control over inventory levels because the vendor can optimize his own operations. This in turn, can lead to lower overall costs. Dell computers provides an excellent example of this. Dell provides complete inventory visibility to their key suppliers and allows them to ship as inventory is needed. For example, when you order a computer online Intel can see how this impacts their inventory of…
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