If retailers sell products from competing manufacturers in a VMI system,
A)inventory at the manufacturer will be lower than optimal.
B)inventory at the manufacturer will be higher than optimal.
C)sales at the retailer will be lower than optimal.
D)inventory at the retailer will be higher than optimal.

Question

Quizplus · Accepted Answer

In a VMI system, the manufacturer is responsible for managing the inventory levels at the retailer's location. If retailers sell products from competing manufacturers, it can lead to higher inventory levels at the retailer, as the manufacturer may have to maintain higher levels of inventory to account for the potential variability in demand. This can result in excess inventory at the retailer, lowering the overall efficiency of the system.

If Retailers Sell Products from Competing Manufacturers in a VMI