Tabitha_Saalfrank_Unit6_Work.docx - Tabitha Saalfrank 13 October 2019 Unit 6 Homework and Case Unit 6 Homework Discussion Questions 13.2 There are

Tabitha_Saalfrank_Unit6_Work.docx - Tabitha Saalfrank 13...

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Tabitha Saalfrank 13 October 2019 Unit 6 Homework and Case Unit 6 Homework Discussion Questions: 13.2 There are several benefits to having VMI or vendor managed inventory, used in an organization. First, it gives the company more control over their inventory, ultimately giving them the ability to more accurately forecast demand. This makes production more efficient for the suppliers, and also allows the company to meet demand and minimize the error in inventory. Another benefit is that reduces inventory cost, which will eliminate waste. It also reduces the frequency of stock shortages. Some disadvantages to the system would be cost, over supply and lack of security. Cost could be a disadvantage, because the vendor would have to take on the costs of starting the technology in their company, and also incur the costs of reorganizing their company into a way that suits the VMI style. Over supply could be an issue, because the vendor can ship a lot more inventory than the retailer might need. Lastly, lack of security is an issue, because they give access of their sales data to the vendors. This could lead to data and security issues like deletion of data, unauthorized access, or even corporate espionage. Some controls that would need to be put in place would be to monitor the inventory levels to ensure that the vendors are providing enough inventory to meet demand. After, they should check them periodically to ensure that the vendors are working efficiently with the system. Another control would be to watch inventory costs, because if VMI is working correctly, inventory costs should decline. The company should also investigate non-authorizes access attempts install security protection systems to ensure that the vendors are acting appropriately. 13.5 If the companies do switch to ERS, it will simplify their accounts payable and eliminate a lot of problems that could arise. They would no longer have to deal with inconsistency of supplier invoices and price quotes when the place their orders. But this isn’t necessarily the best option, because for ERS to
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