Question

Which approach for improving marketing channel efficiency involves the manufacturer being responsible for maintaining the retailer's inventory levels in each of its stores?

a) Direct marketing
b) Supply chain optimization
c) Consignment inventory
d) Vendor-managed inventory

Answer 1

Vendor-managed inventory is the approach where a manufacturer maintains the retailer's inventory, resulting in reduced holding costs and better stock level alignment with sales demand.

Step-by-step explanation:

The approach for improving marketing channel efficiency that involves the manufacturer being responsible for maintaining the retailer's inventory levels in each of its stores is known as Vendor-managed inventory (VMI).

In a VMI system, the vendor monitors the seller's inventory levels, either physically or via electronic methods, and makes necessary adjustments to stock by supplying more goods when needed.

This approach allows retailers to minimize their inventory holding costs and ensures a better alignment of stock levels with actual sales demand, leading to enhanced efficiency in the supply chain.

correct option d) Vendor-managed inventory