Vendor Managed Inventory versus Consignment Inventory.

Inventory management has two very different, but rough-and-ready methods: vender managed blood line, and consignment enrolment. A company whitethorn choose to expend either of these two methods to manage channel-taking. If a company is satisfactory to manage stock certificate, they willing be collapse able to land the companys capital to the fullest extent. The following paper will identify the differences between the two as well as identify what character of company is best suited for all(prenominal) method. Definition. Vendor managed inventory (VMI) is a means of optimizing sum train performance in which the shaper is responsible for maintaining the electrical distributors inventory levels. The producer has access to the distributors inventory info and is responsible for generating purchase orders. below VMI the manufacturer receives electronic data (usually EDI or via the internet) that tells him the distributors sales agreements and stock levels. The ma nufacturer can have every point that the distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order, non the distributor. (Williams, 1996). Consignment inventory (CI) is when the supplier places inventory at a customers location and retains ownership of the inventory. Payment is not made until the item is actually sold.

In other words, the supplier places some of his inventory in his customers possession (in their store or warehouse) and allows them to sell or consume directly from his stock. The customer purchases the inventory only afterward he has resold or consumed it (Williams, 1996). Set up of des! ign/Software. VMI packet application manages stock levels from various locations. With an endless supply of usable stock, VMI package provides companies with complete list of inventory. Comergent is one of galore(postnominal) companies which provide VMI software murder and training (Comergent.com). On average, implementation of... If you want to detect a full essay, order it on our website: OrderEssay.net

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