Consignment Inventory
Consignment inventory is a supply chain arrangement where a supplier places goods at a customer's location, but the customer only pays for the items when they are sold or used. This shifts inventory ownership and risk to the supplier until consumption occurs, often used to reduce stockouts and improve cash flow for the buyer. It's common in retail, manufacturing, and distribution to optimize inventory management and strengthen supplier relationships.
Developers should understand consignment inventory when building or integrating systems for supply chain management, e-commerce, or enterprise resource planning (ERP) to handle complex inventory tracking, payment processing, and reporting. It's particularly relevant for applications in industries like retail, where real-time inventory updates and automated billing upon sale are critical for operational efficiency and financial accuracy.