Which of the following defines "consignment inventory"?

Consignment inventory refers to inventory that is owned by the supplier but is stored at the customer's location until it is used or sold. This arrangement allows the supplier to maintain ownership of the stock until the customer sells it, which minimizes the financial risk for the customer. This means the customer does not have to purchase the inventory upfront, thus freeing up cash flow while still having stock available for sale.

This arrangement is beneficial for both parties. The supplier can expand their distribution network and increase sales, while the customer can have access to inventory without immediate financial commitments. The inventory remains on the supplier's balance sheet until it is sold, which impacts inventory management strategies.

The other choices describe different inventory situations that do not align with the definition of consignment inventory. For instance, inventory owned by the customer at the supplier’s location, purchased but unsold inventory, and outdated inventory do not reflect the specific nature of consignment inventory, where the supplier retains ownership until a sale occurs.