Council of Supply Chain Management Professionals (CSCMP) 2025 – 400 Free Practice Questions to Pass the Exam

VMI, or Vendor-Managed Inventory, is beneficial for customers primarily because it reduces the need for staff monitoring inventories. In a VMI arrangement, the supplier takes responsibility for managing inventory levels at the customer's location. This means that the supplier monitors stock levels, forecasts demand, and replenishes inventory as needed. As a result, the customer's employees have less burden in terms of tracking inventory levels, placing orders, and managing stock levels.

By freeing up staff from these tasks, companies can allocate their resources more efficiently. Employees can focus on other critical tasks rather than spending time on inventory management, thereby improving overall productivity and efficiency within the organization. VMI can also lead to better inventory turnover and reduced stockouts, as suppliers are often more adept at managing the nuances of their specific products.

The incorrect options highlight aspects that do not serve as advantages of VMI. For instance, the notion of increased inventory storage contradicts the purpose of VMI, which often leads to optimized inventory levels. Similarly, increasing lead times undermines the goal of streamlining supply chain operations, while stating that VMI offers no significant advantages dismisses the efficiencies gained through reduced monitoring efforts and better inventory management.