Description: The ‘Just in Case Inventory’ is a stock management strategy that involves maintaining additional stock of products to prevent shortages and ensure supply continuity. This practice is based on the premise that, while planning and demand forecasting are essential, there is always the possibility of unforeseen events, such as sudden increases in demand or disruptions in the supply chain. By keeping extra inventory, companies can mitigate the risk of running out of products, which could result in lost sales and dissatisfied customers. This strategy is particularly relevant in industries where demand can be volatile or where lead times are long. However, ‘Just in Case Inventory’ also incurs additional costs, such as storage and product obsolescence, requiring a careful balance between the cost of holding inventory and the cost of potential losses from stockouts. In summary, this strategy aims to optimize product availability, ensuring that companies can effectively respond to market fluctuations and customer needs.
