Vendor Management Inventory Agreement
The first is the activity data of the product known as 852. This EDI transaction contains sales and inventory information, such as major product activities and planning indicators, z.B.B. This relates to the type of information on customer needs shared to help suppliers control their inventory. Many types of needs information are shared under the VMI program. Information on the needs that are visible to the supplier are sales data, inventory collection, production plan, stock, goods in transit, order delivery, orders and return. The argument is that data and inventory exchange can improve the supplier`s production planning, make it more stable and visibility. It also provides a better understanding of seasonal changes and helps identify critical periods. The supplier can therefore use this information, adapt its production to customer demands and react more quickly. With the increasing visibility of the information, the supplier has a longer time frame for replenishment  The supplier also has real-time visibility that allows it to have a hand in stock for the planning of buyer demand, allowing the stock to be projected according to future demand in order to target (minimize or maximize) its inventory.  This stability and coordination reduces the Bullwhip effect because the manufacturer has clearer supply chain visibility and an overview of incoming demand . The first class of VMI, bi-level VMI-mathematics, includes two levels (or rungs) in a supply chain: suppliers and distributors. There are three types of VMI mathematics models that have been developed from this class, which are a single VMI supplier model with a single retailer, a VMI model with multiple vendors, and a VMI model with multiple vendors.  This class has evolved considerably.
For example, the VMI model has been extended with a single distributor for several products the consignment stock (CS),  and the discount.  Zammori, F., Braglia, M. and Frosolini, M. (2009), “A standard agreement for vendor managed inventory,” Strategic Outsourcing: An International Journal, Vol. doi.org/10.1108/17538290910973376 Another option may be that the lender delivers to the central debitor warehouse or, alternatively, to a third party`s warehouse. The latter can be a solution for buyers who have outsourced some or all of their logistics operations. Inventory management in the central warehouse allows for better optimization of deliveries, reduced costs and ultimately allows the buyer to maximize economies of scale.  However, this is not always an option, so third-party warehouses are often the solution to many different problems, such as the supplier`s warehouse.
B, which is too far removed from the buyer`s inexperience, or the buyer`s inexperience in storing certain types of products more difficult to store.  In traditional inventory management, a retailer (sometimes called a buyer) makes its own decisions about the size of the order, while the VMI distributor shares its inventory data with a supplier (sometimes called a supplier) so that the seller is the decision maker who determines the size of the order for both. Thus, the seller is responsible for the distributor`s ordering fee, while the merchant must pay his own holding costs. This directive can prevent the storage of unwanted stocks and thereby lead to a general reduction in costs. In addition, the Bullwhip effect is also reduced by the use of the VMI approach in buyer-supplier cooperation.  Because supply frequencies play an important role in integrated stock models to reduce the total costs of supply chains that, in many studies, are not modelled into mathematical problems.  In the third alternative, also called standard procedure in traditional deliveries, the retailer has the inventory at the time of delivery, while the seller charges the distributor once the delivery is made.