Inventory Reporting and Replenishment
Inventory models are used in the context of Supplier-Managed Inventory (SMI) requiring the reporting of current inventory levels and/or consumption data. The buyer uses an inventory report to report consumption of inventory instead of embedding it in an consumption schedule or sending a separate report of inventory consumption.

For forecast-based SMI, the buyer sends its supplier forecasts of planned consumption and its anticipated production requirements, typically using a weekly forecast message. Additionally, the buyer may send an inventory report more frequently to the supplier, detailing current stock levels, new quantities received into inventory, and quantities that have been consumed since the previous report. From this data, the supplier calculates schedules and delivers product to maintain the level of inventory defined by the buyer.

For consumption-based SMI, consumption data is used by the supplier to calculate and schedule deliveries in order to maintain the level of inventory defined by the buyer.

For inventory not on consignment, change of ownership of the product occurs when the product is received by the buyer.

Inventory Reporting and Consignment
Inventory models are used in the context of consignment. Inventory owned by the seller is physically located at buyer’s facility, the facility of the buyer's agent, or the facility of the seller's agent. Ownership of the inventory remains with the seller until the event that triggers change of ownership occurs. The buyer or agent performs inventory counts and reports to seller (scheduled, as-needed, or at seller request). The seller may invoice for inventory shrinkage. A buyer holding consigned inventory (on site or at agent's site) may also use the inventory report to report billable consumption of inventory or other event that triggers transfer of ownership instead of sending a separate report of inventory consumption.

Frequently, trading partners engage in programs that combine supplier-managed inventory and consignment.  This is not as complex as it sounds if you realize that the former is about deferring planning of inventory replenishment, and the latter is about deferring billing and payment.

Report Inventory Levels Overview (Use Case) Diagram

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Report Inventory Levels Activity Diagram

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Activity	Description
1	The sender (buyer or warehouse) generates and sends an inventory report.
2	The recipient (seller) processes the report.