Question

When a customer allows the supplier to manage inventory policy for an item or group of items.

Short answer

Vendor managed inventory

Step-by-step solution

Meaning of supplier

A supplier is a company that sells goods or services to another company. This entity is a part of a company's supply chain, and it has the potential to deliver the majority of the value in its products. Dropshipping involves distributing products straight to the buyer's clients,whichsome providersmay use.

A supplier is a term used to describe a manufacturer or distributor. A distributor is a business that buys products from several manufacturers and sells them to its customers.

Vendor managed inventory

Vendor managedinventory (VMI) is a corporate structure in which a product's buyer sends information to the seller. The vendor is responsible for keeping an agreed-upon inventory of the item, usually at the customer's consumption location.

A third-party logistics provider can ensure that the buyer has the right amount of inventory by managing demand and supply gaps. VMI reduces inventory in the supply chain, making it less likely for a company to fall out of stock of a product by accident.