Question

Which are generally considered benefits experienced by retailers participating in vmi? select all that apply

a. fewer stock outs
b. slower inventory turns
c. more timely replenishment
d. lower labor costs
e. improved cash flow over time

Answer 1

Retailers participating in Vendor Managed Inventory (VMI) benefit from fewer stock outs, more timely replenishment, lower labor costs, and improved cash flow over time. Slower inventory turns is generally not considered a benefit of VMI.

Step-by-step explanation:

Vendor Managed Inventory (VMI) is a business model in which the supplier assumes the responsibility of managing inventories for the retailers. There are several benefits that retailers can experience by participating in a VMI program. These benefits include:

• Fewer stock outs: Retailers experience fewer stock outs because suppliers monitor inventory levels in real-time and can replenish stocks before they are depleted.
• More timely replenishment: VMI enables suppliers to respond more swiftly to fluctuating demand, ensuring that retailers receive inventory replenishments as soon as they are needed.
• Lower labor costs: Retailers can save on labor costs associated with inventory management because the supplier handles most of the work, such as order processing, inventory tracking, and replenishment.
• Improved cash flow over time: With better inventory management, retailers can keep less inventory on hand, which improves their cash flow by reducing capital tied up in inventory.

The option that does not apply is slower inventory turns, which is not a benefit of VMI. In fact, VMI typically leads to faster inventory turnover because the inventory levels are more closely aligned with actual sales data, which means less excess stock and more efficient sales processes.