1. JIT is a strategy aimed at producing or purchasing goods just in time for use in the production process or to meet customer demand.
Warehousing is a strategy, the practice of storing goods in a facility to ensure a steady and timely supply to meet demand.
Overstocking is happen occurs when a company holds excess inventory beyond what is necessary for current demand.
Understocking is happen occurs when a company has insufficient inventory to meet current demand.
2 Just-in-Time (JIT)
Benefits:
Lower storage and holding costs
Reduced risk of electronics becoming outdated
Improved cash flow
Drawbacks:
High risk of stockouts if suppliers delay
Not suitable during sudden demand spikes
Requires strong supplier relationships
Warehousing
Benefits:
Better product availability
Easier to handle bulk purchasing
Reduced risk of stock shortages
Drawbacks:
High storage and maintenance costs
Risk of product obsolescence in electronics
Requires warehouse management resources
Overstocking
Benefits:
Products are always available for customers
Useful during sales seasons or product launches
Drawbacks:
High holding costs
Electronics lose value quickly due to new models
Risk of unsold inventory
Understocking
Benefits:
Low storage and holding costs
Less capital tied up in inventory
Drawbacks:
Frequent stockouts
Loss of sales and customer dissatisfaction
Poor brand reputation
33. Recommended Inventory Management Strategy
For an electronics retail company, the most suitable strategy is a combination of Just-in-Time (JIT) and limited Warehousing.
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