LOG 503 MODULE 1 CASE INVENTORY MANAGEMENT

LOG 503 MODULE 1 CASE INVENTORY MANAGEMENT

LOG 503 MODULE 1 CASE INVENTORY MANAGEMENT

Vendor-managed inventory is the name given to the inventory that is generally managed by the vendor or supplier. The vendor themselves are likely to determine how much and how often to replenish the inventory. It is a concept that has been around for a long time and can be observed in small businesses such as restaurants, bakeries and so on. In large scale organizations, shipping may be done by the vendors, as well as the cleaning or maintenance supply inventory. The inventory itself may be managed by the leaders or the vendors as it is the direct responsibility of them to keep it replenished and in working order. Businesses choose to go with VMI as it gives full control to the vendor in managing the inventory, which means there is a certain order to things and there can be no external factors affecting the number of valuables in the inventory itself. Customers themselves tend to favor vendor-managed inventory as it is somewhat of a relief of burden on their shoulders as the responsibility to replenishing and maintaining an inventory is no longer on them. It is also a good way to ensure only the most responsible and dependable individuals are given the duty of replenishing inventories. Through VMI, it becomes likely that the vendor will do the supplying of products while reaching within the product group, as opposed to customers having multiple vendors within the group itself. It may make it difficult for the customers to switch vendors at any given state in time, as that is bad practice. Inventory management effectiveness is obviously one of the biggest advantages in a vendor-managed inventory. It reduces the costs incurred by the vendors through the association of more sophisticated methods of inventory.  More control can be practiced by the vendor over their shipping schedule and finance methods can be arranged easily this way. Not only this, the placing of orders can be under the vendors control too which means there are no conflicts in time management. With a bigger group, there are likely to be disagreements on whether certain items are required to even come back but with the elimination of a group, an easier way to accommodate the inventory can take place.

 

 

Bullwhip effect or BWE can best be defined as ...