Warehouse & Logistics Encyclopedia
Your comprehensive guide to warehouse, logistics, and supply chain terminology. Explore over 100+ industry terms with detailed explanations and practical insights.
Consignment Inventory
Inventory owned by the supplier but stored at the buyer's location until used or sold.
Definition
Consignment inventory allows suppliers to store goods at a customer's premises while retaining ownership until items are consumed or sold.
Overview
Consignment inventory improves supply chain responsiveness and reduces buyer inventory costs.
Role
Inventory owned by the supplier but stored at the buyer's location until used or sold.
Focus
Consignment inventory improves supply chain responsiveness and reduces buyer inventory costs.
Example
A manufacturer keeps a stock of spare parts at a distributor's warehouse, billing only when parts are used.
Benefits
- Reduces buyer capital investment
- Improves product availability
- Strengthens supplier-buyer collaboration
FAQs
Q: Can you give an example of Consignment Inventory?
A: A manufacturer keeps a stock of spare parts at a distributor's warehouse, billing only when parts are used.
Q: What are the key benefits of Consignment Inventory?
A: Reduces buyer capital investment. Improves product availability. Strengthens supplier-buyer collaboration.