The Full Form of VMI is Vendor-managed inventory.

Vendor Managed Inventory (VMI) is a business model where the buyer of a product provides information to a vendor of that product and the vendor takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer’s consumption location.

A third party logistics provider can also be involved to make sure that the buyer have the required level of inventory by adjusting the demand and supply gaps. VMI makes it less likely that a business will unintentionally become out of stock of a good and reduces inventory in the supply chain.

Some vendors supply an advance ship notice (ASN) to their customers to inform them of an incoming order, which is known as EDI 856. The ASN differs from the purchase order acknowledgment in both timing and content. The 856 is sent to the customer after the shipment has been made instead of at the time of the purchase order.