In consignment inventory arrangement

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Reference no: EM131145233

In a “consignment” inventory arrangement, the buyer does not pay the supplier for the purchased items until they are sold or used. If the buyer is concerned only about optimizing its own position, how does such an arrangement affect its (the buyer’s) purchasing policy, i.e. its EOQ? What may be the motivation on the part of the supplier for agreeing to adopt such a consignment inventory policy? What is (are) the effect(s) of such a policy from the perspective of the supply chain as a whole?

Reference no: EM131145233

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