Question

Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand.

True or False

Answer 1

False

In traditional inventory management, the retailer (sometimes called the buyer) makes personal decisions about the size of the order, while in Vendor-managed inventory(VMI) the retailer distributes his inventory data with the supplier (sometimes called the supplier). So the supplier is the one who decides. Determine the size of the order for both. In this way, the seller is responsible for the cost of the retail order, while the merchant has to pay the individual fee. This principle can prevent unwanted stock storage and thus can lead to a reduction in overall costs. In addition, the transfer efficiency is also reduced by using the VMI method in collaboration with the buyer. Because frequency plays an important role in integrated inventory models to reduce the total cost of supply chains, many studies have not modeled mathematically.