Council of Supply Chain Management Professionals (CSCMP) Practice Exam 2026 - Free CSCMP Practice Questions and Study Guide

A key benefit of vendor managed inventory (VMI) for suppliers lies in improved service and the potential for increased sales. Under VMI, the supplier takes responsibility for managing inventory levels at the customer's site. This arrangement allows suppliers to gain better insights into the inventory needs and consumption patterns of their customers. As a result, suppliers can ensure that products are available when needed, minimizing stockouts and enhancing customer satisfaction.

By consistently meeting inventory demands and providing timely replenishments, suppliers can strengthen their relationships with customers. This improvement in service can lead to higher customer loyalty and potentially drive increased sales, as satisfied customers are more likely to maintain or expand their purchasing volumes. In addition, suppliers can optimize their production and distribution processes based on real-time data, further enhancing efficiency and responsiveness to market changes.

In contrast, the influences described in the other options, such as reduced interactions with customers, increased inventory risks, or higher overhead costs, do not typically characterize the advantages of VMI for suppliers. VMI is fundamentally about collaboration and optimizing supply chain dynamics, rather than reducing engagement or incurring additional costs.