Vendor Managed Inventory, (VMI), describes a family of business models in which the buyer of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store). VMI makes it less likely that a business will unintentionally become out of stock of a good and reduces inventory in the supply chain. This is one of the successful business models used by Wal-Mart. VMI will help foster a closer understanding between the supplier and manufacturer by using Electronic Data Interchange and other statistical methodologies to forecast and maintain correct inventory in the supply chain.

See also

• Scan-based trading