What principle underlies “just-in-case” inventory management?

The principle that underlies "just-in-case" inventory management is primarily about preparing for fluctuations in demand. This approach involves maintaining a higher level of inventory to ensure that an organization can meet unexpected increases in customer demand or disruptions in supply. By holding additional stock, businesses can mitigate the risks associated with demand spikes or supply chain uncertainties, allowing for greater responsiveness and reliability in fulfilling orders.

In contrast, minimizing stock levels focuses on reducing inventory to lower holding costs, which is more aligned with "just-in-time" practices rather than preparing for potential demand increases. Eliminating waste in the supply chain is part of lean management principles, which aim to optimize efficiency but do not directly relate to the rationale behind holding extra inventory. Lastly, requiring fewer suppliers for bulk purchasing can lead to cost savings but does not address the need for maintaining inventory levels that can absorb demand variability. Therefore, the emphasis on preparing for fluctuations in demand aptly defines the rationale of "just-in-case" inventory management.