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Vmi Service Level Agreement

The inventory can also be located directly at the buyer`s premises, for example.B. in the buyer`s warehouse on site, in the production line or in the workshop itself. [18] However, replenishment at these specific sites can be more expensive, less organized and, overall, more difficult for the supplier to manage. [19] Due to the implementation effort, VMI is exactly what is needed for large numbers of parts needed. Our experience shows that VMI can make a significant contribution to improving the level of service and, in particular, to reliably compensating for fluctuations in demand. Typically, VMI contracts achieve stable service levels in the 99% range over the long term. It is one of the successful business models used by Walmart and many other major boxing retailers.