XYZ Company as a retail company, has entered into agreement with ABC Company, which is a producing company. In this agreement, ABC Company will decide how much of their products customers will buy from XYZ, and ship that directly to the retail outlet. This strategy can be described as
A) joint inventory control.
B) vendor-managed inventory.
C) inventory cost control.
D) inventory memorandum.

Question

Quizplus · Accepted Answer

The strategy described in the scenario is vendor-managed inventory (VMI). In VMI, the producing company (ABC) takes responsibility for managing the inventory levels of their products at the retail company (XYZ) and decides when and how much to ship to replenish the stock. This helps in maintaining product availability for customers while reducing inventory holding costs for the retailer.

XYZ Company as a Retail Company, Has Entered into Agreement