Final answer:
Pharmaceutical companies use vendor-managed inventory to maintain predetermined inventory levels at retail stores by monitoring daily sales.
Step-by-step explanation:
Pharmaceutical companies such as Eli Lilly and SmithKline Beecham use vendor-managed inventory (VMI) to ensure that retailers carrying their products maintain predetermined inventory levels in stock. By conducting daily monitoring of sales at individual stores, these companies can efficiently manage inventory levels, reducing the burden on retailers to order stock. This system allows pharmaceutical companies to maintain a balance that prevents both overstocking and stockouts, ensuring that the supply chain operates smoothly and that their products are always available to meet customer demand. The correct answer to the question is vendor-managed inventory.
Pharmaceutical companies such as Eli Lilly and SmithKline Beecham use vendor-managed inventory to ensure that retailers carrying their products maintain predetermined inventory levels in stock. This is done through the daily monitoring of sales at individual stores. Vendor-managed inventory (VMI) is a supply chain strategy where the supplier takes responsibility for managing the inventory levels at the retailer's location. In this case, the pharmaceutical companies monitor the sales and inventory levels at the retailers and make sure that the predetermined levels are maintained. For example, if a particular store is running low on a specific medication, the pharmaceutical company will be notified and can take appropriate action to restock the medication at that store.