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Which of the following is NOT often associated with supplier-managed inventory (SMI) arrangements? Multiple Choice

a) Long-term commitments from both parties.
b) Supplier representative located at the customer site.
c) Customers recommend to suppliers how they should schedule production
d) Suppler places replenishment orders.
e)All of these are typically associated with SML

1 Answer

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Final answer:

In supplier-managed inventory arrangements, it is the supplier who is responsible for managing and replenishing inventory, not the customer. Therefore, customers recommending to suppliers how they should schedule production is not typically associated with these arrangements. Option c. is correct.

Step-by-step explanation:

The question is asking which of the following options is NOT often associated with supplier-managed inventory (SMI) arrangements. SMI, also known as vendor-managed inventory (VMI), is a supply chain management strategy where the supplier takes responsibility for managing and replenishing inventory based on agreed-upon inventory levels.

Option c), 'Customers recommend to suppliers how they should schedule production,' is NOT typically associated with SMI arrangements. In SMI, the supplier is responsible for monitoring the customer's inventory levels and making decisions about when to replenish stock and how much to supply, which usually does not involve the customer recommending production schedules.

On the other hand, options a), 'Long-term commitments from both parties,' b), 'Supplier representative located at the customer site,' and d), 'Supplier places replenishment orders,' are all typical features of an SMI arrangement. Therefore, the answer is option c).

User Vadim Tychonoff
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