Inventory availability meaning

What is a borrowing base facility? Borrowing base facilities (‘BB Facilities’) are a form of trade finance. They are working capital arrangements that provide short-term liquidity either through advances or by issuing trade instruments, such as letters of credit (see: Letters of credit—overview) or on demand guarantees (see: On demand guarantees/bonds—overview). These facilities are fully secured against current assets—commonly trading receivables, inventory (i.e. goods in storage or in transit), cash and contractual rights—of the borrower and/or other security providers. Consequently, the borrower’s available capital at any given time is directly linked to the value of the assets securing the lender(s). BB Facilities are typically offered to trading companies on a revolving basis to fund the purchase, storage, transport and sale of prescribed commodities. They are often used to finance a pool of traded assets subject to high price volatility. Reflecting this, a standard borrowing base facility agreement will include provisions focused on those assets and their valuation. A typical BB Facility has a tenor of 1–2 years, although...

Vendor-managed inventory (VMI) Originally written by Timothy Murray of Murray, Hogue & Lannis for Lexis Practical Guidance US, and refined for Lexis+ UK, this Practice Note explores how vendor-managed inventory (VMI) works, its advantages, and its pitfalls. VMI—also called supplier managed inventory—is a supply chain approach. It offers a streamlined method for inventory control and product order fulfilment, under which the vendor (supplier or manufacturer) oversees the customer’s stock. The customer delegates to the vendor the tasks of monitoring usage and topping up inventory levels. See the accompanying Precedent: Vendor managed inventory (VMI) agreement. In a VMI model, the supplier, not the customer, accepts responsibility for tracking the customer’s sales and stock positions to decide when further products are required to satisfy the customer’s needs. Rather than waiting to receive and act on purchase orders, the supplier obtains and/or reviews the customer’s sales and inventory data and, using that information, determines the timing and quantities necessary to replenish the customer’s inventory. In theory, VMI supports cost-efficient product availability...