Proctor & Gamble (but not Wal-Mart) manages the inventory at the distribution centers owned by Wal-Mart. This is an example of a concept called Vendor Managed Inventory (VMI). How does Wal-Mart's supply chain benefit from VMI? Discuss with reasoning.
Recall the following from the Module Four lecture document: “The manufacturer is trying to decide how many units to produce for the upcoming season. If too many products are produced, some of the products may be left unsold by the manufacturer to the distribution center. If too few products are produced, the manufacturer may lose some potential profit it could make from sale to the distribution center.” A similar challenge is faced by the distribution center. In other words, if too many products are bought by the distribution center from the manufacturer, some of the products may be left unsold by the distribution center to the retail stores. If too few products are bought by the distribution center, the distribution center may lose some potential profit it could make from sale to the retail stores. Discuss how the manufacturer and the distribution center can resolve their respective challenges while neither party should benefit at the expense of the other.
Work with your group to research and brainstorm how you might use customer categories for product pricing. Be sure to identify the categories a company would choose and provide reasons for your decisions in your group discussion.
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