A Vendor Managed Inventory (VMI) System is a dynamic and powerful business tool that enables vendors to actively manage the inventory levels of their clients, ensuring that there is an optimal balance between customer demand and supplier availability. By monitoring customer order trends, sales rates, and stock levels, vendors can ensure they provide timely delivery-of-goods and prevent costly stock shortages or overstocks. This inventory management strategy helps to facilitate smoother business operations and cost savings for both buyers and sellers – enabling businesses to better coordinate supply with demand.