CIM Vendor-Managed Inventory 2

Question 1

Which data sharing mechanism is most commonly used between suppliers and retailers in a VMI arrangement?

Accepted Answer

Electronic Data Interchange (EDI)

Answer

EDI enables automated, real-time data exchange of inventory levels and sales data between trading partners in VMI.

Question 2

In VMI, what is the primary metric the vendor monitors to trigger replenishment?

Accepted Answer

Retailer's on-hand inventory levels

Answer

The vendor continuously monitors the retailer's on-hand stock levels and replenishes when inventory falls to a predefined threshold.

Question 3

A VMI program reduces the 'bullwhip effect' primarily by:

Accepted Answer

Giving suppliers direct access to real demand data

Answer

Direct visibility into downstream demand eliminates demand distortion caused by sequential order batching across supply chain tiers.

Question 4

Under a VMI agreement, who typically owns the inventory while it sits at the customer's location?

Accepted Answer

It depends on whether consignment terms are included

Answer

VMI does not automatically transfer ownership; consignment VMI keeps vendor ownership while non-consignment VMI transfers it upon delivery.

Question 5

Which KPI is most appropriate for measuring vendor performance in a VMI program?

Accepted Answer

Fill rate / service level at the customer's location

Answer

Fill rate measures how well the vendor maintains adequate stock at the customer's site, which is the core VMI obligation.

(CIM) Certified Inventory Manager Practice Test