What strategy could be used to effectively manage inventory changes?

The strategy of continuous monitoring and proactive ordering based on demand is highly effective for managing inventory changes because it allows for a responsive approach to varying customer needs and market conditions. Continuous monitoring involves keeping a close eye on inventory levels, sales trends, and market fluctuations. This real-time data ensures that stock levels are adjusted promptly to prevent either surplus or shortages.

Proactive ordering based on demand means that instead of waiting for inventory to run low or being reactive to trends after they have developed, inventory management can be adjusted ahead of time. By anticipating demand changes, a business can ensure that popular items are readily available, enhance customer satisfaction, and optimize stock levels, leading to reduced holding costs and increased sales.

This approach integrates both analysis of current performance and forecasting future trends, allowing for a more agile supply chain management system that can adapt quickly to changes in consumer behavior.