VENDOR MANAGED INVENTORY Definition

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VENDOR MANAGED INVENTORY (VMI) is a process in which a supplier generates orders for its distributor based on demand information sent by the distributor. Vendor Managed Inventory was first applied to the grocery industry, between companies like Procter & Gamble (supplier) and Wal-Mart (distributor). But increasingly, Vendor Managed Inventory is providing the benefits of smoother demand, increased sales, lower inventories and reduced costs to other industries.

Learn new Accounting Terms

DIO is Days Inventory Outstanding.

IN-KIND is the value of goods or services provided for which money would have otherwise been paid.

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