Which of the following is a characteristic of Vendor Owned Inventory?

The characteristic of Vendor Owned Inventory is best described by the option indicating that the supplier retains ownership even while it's held on the buyer's premises. This arrangement allows suppliers to maintain ownership of the goods until they are used or sold, which is distinct from traditional inventory management models where the buyer owns the inventory upon purchase.

This model is advantageous in several ways. It reduces the financial burden on the buyer, as they do not have to pay for inventory upfront or take ownership until the product is utilized. It also minimizes the risk of overstocking and carrying costs for the buyer, since the supplier retains ownership. Moreover, if the inventory is not sold or used, the supplier may take it back, which can help in managing unsold stock.

In contrast, the other options present different aspects of inventory ownership and risk management that do not apply to Vendor Owned Inventory. For instance, in standard purchasing agreements, a buyer typically pays for inventory upon order, assumes risk upon ownership, or may incur charges for inventory that is not owned, which does not align with the vendor-owned model.