What is one of the key advantages of using VMI in supply chain management?

Using Vendor Managed Inventory (VMI) in supply chain management provides the significant advantage of minimizing stockouts and inventory excess. In a VMI system, the supplier is given access to the inventory data and is responsible for managing the inventory levels at the customer's location. This collaborative approach allows suppliers to optimize inventory based on real-time demand, ensuring that stock levels are maintained efficiently.

By closely monitoring inventory levels and understanding the purchasing patterns, suppliers can ensure that the right amount of product is available when needed, thereby reducing the risk of stockouts. This is crucial for maintaining customer satisfaction and operational efficiency. Additionally, VMI helps to prevent excess inventory, which can tie up capital and lead to increased holding costs. The proactive management of stock aligns production and distribution schedules more effectively with actual sales, enhancing the overall flow of goods in the supply chain.

In contrast, the other options do not capture the same benefits associated with VMI. Greater control over final product pricing, reduced supplier communication, and increased lead times are not intrinsic advantages of VMI, as the model emphasizes collaboration, efficient replenishment, and dynamic inventory management instead.