In Vendor-Managed Inventory (VMI), who is responsible for maintaining inventory levels?

In Vendor-Managed Inventory (VMI), the manufacturer is responsible for maintaining inventory levels. This approach shifts the responsibility of inventory management from the retailer to the manufacturer, allowing the manufacturer to directly manage the inventory levels at the retailer's location. By doing so, the manufacturer can leverage their expertise in demand forecasting and supply chain management to ensure that the right amount of product is available, thereby reducing the likelihood of stockouts or excess inventory.

This system enhances collaboration between the manufacturer and retailer, as the manufacturer has access to sales data and inventory levels, enabling them to make more informed decisions about replenishment and stocking. As a result, VMI can lead to improved efficiency, reduced costs, and better service levels for customers.

The other options involve parties that typically do not have the same level of control or insight into inventory management as the manufacturer in a VMI setup. Retailers' sales staff, for instance, may communicate inventory needs but are not responsible for actual inventory levels; third-party logistics providers primarily focus on transportation and warehousing, not inventory management; and distribution center management handles logistics but is not tasked with managing retailer shelf inventory under VMI.