Vendor-Managed Inventory (VMI)
• Vendor-managed inventory (VMI) is an approach for
improving supply chain efficiency in which the
vendor is responsible for maintaining the retailer’s
inventory levels.
• The vendor determines a reorder point—a level of
inventory at which more merchandise is ordered.
• The retailer shares sales and inventory data with the
vendor via EDI.
• When inventory drops to the order point, the vendor
generates the order and delivers the merchandise.