Vendor-Managed Inventory Flashcards
7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Vendor-Managed Inventory flashcards as text
A VMI arrangement where the vendor owns inventory until the customer actually uses or sells it is called:
Answer: Consignment VMI
Consignment VMI keeps title with the supplier until the point of consumption or sale, reducing the customer's working capital requirements.
Which of the following best describes 'demand transparency' in the context of VMI?
Answer: The supplier's access to the buyer's point-of-sale or usage data
Demand transparency means the supplier can see actual sales or consumption data at the customer's location, enabling accurate replenishment.
In healthcare supply chains, VMI is often used in hospital stockrooms primarily to:
Answer: Reduce nurse time spent on supply requisitioning and ordering
VMI in hospitals shifts supply management to the vendor so clinical staff can focus on patient care rather than inventory tasks.
When calculating the economic benefit of VMI to the buyer, which cost reduction is most directly attributable?
Answer: Reduction in purchase order processing and administration costs
Because the vendor manages replenishment, the buyer no longer needs to generate and process purchase orders, cutting procurement administrative costs.
A VMI vendor notices the customer's sales are trending upward by 15% week over week. The correct response is to:
Answer: Proactively increase the replenishment quantity to prevent a stockout
Under VMI, the vendor is responsible for using demand signals to adjust replenishment proactively before stockouts occur.
Which of the following is a critical success factor for VMI implementation?
Answer: Mutual trust and data sharing between trading partners
VMI requires open sharing of proprietary sales data and confidence that the vendor will act in the customer's best interest.
A vendor managing inventory for five retail locations notices one location consistently hits the minimum level faster than others. This most likely indicates:
Answer: Higher demand at that location requiring location-specific min/max parameters
Demand variation across locations requires individualized min/max settings rather than a one-size-fits-all replenishment policy.