Vendor-managed inventory is where the company does not monitor its own inventory, but suppliers monitor the company's inventory and ship as needed. This allows them to better track their actual demands because there is little surplus, allowing customers to not only get a newer product that hasn't been on the shelf for a longer period of time, but also allows them to to personalize the product. final product more. Think Model T Ford. “you can have any color, as long as it’s black.” People will pay more to be able to customize their products, which everyone has. I own a Nissan Versa and besides customizing fries and stale car seats, I have placed other items on my car that make my care more valuable to me and less valuable to me.