Which One of the Following Statements Is True About Vendor-Managed

question 36

Multiple Choice

Which one of the following statements is true about vendor-managed inventory (VMI) ?

• A)VMI is a form of outsourcing.
• B)VMI often increases the bullwhip effect.
• C)VMI is used only in responsive supply chains.
• D)VMI is identical to contract manufacturing.

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Definitions:

Quarterly Payments

Payments made four times a year at three-month intervals, often related to dividends or loan repayments.

Interest Rate

The expense a borrower bears for the use of funds from a lender, measured as a fraction of the principal.

Discount Rate

This term refers to the interest rate used in discounted cash flow analysis to figure out the current value of cash flows that will occur in the future.

Present Value

The contemporary equivalence of a series of future cash inflows or a single future sum, adjusted by a given rate of return.