What Strategies Can Entrepreneurs Use to Manage Inventory Levels?
Entrepreneurs can adopt several strategies to manage inventory levels effectively:
Just-In-Time (JIT): This approach minimizes inventory by ordering stock only when needed, reducing holding costs. ABC Analysis: Categorize inventory into three classes (A, B, and C) based on importance and value, focusing more on high-value items. Safety Stock: Maintain a buffer stock to account for unexpected demand spikes or supply chain disruptions. Vendor-Managed Inventory (VMI): Allow suppliers to manage inventory levels based on agreed-upon metrics, thereby shifting the burden of inventory management.