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Vendor managed inventory

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Sheen wondered why she could not proceed to a form of "vendor managed inventory" in her relationship with Armentrout. Specifically, she wondered if she, rather than Armentrout, should decide how much to stock at the newsstand. Under her "VMI plan," Sheen reasoned, Armentrout did not require a commission for additional sales. "Previously, I had to ensure that his margins were structured appropriately, because he decided how much to stock. Why should I pay him a commission if he does not have stocking decision rights?" she thought aloud. Anna figured she could pay Ralph a "slotting allowance" (i.e., a fixed daily payment independent of Express demand) under the VMI plan.

Reference no: EM133576495

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