When managing inventory, what is a key step to prevent stockouts?

• A. Ignore promotions and stock based on intuition.
• B. Monitor daily sales velocity, reorder points, and ensure POS data reflects promotions and backorders.
• C. Reorder only after stockouts occur.
• D. Keep maximum stock at all times regardless of demand.

Answer: (B)

Tracking how fast items sell, setting appropriate reorder points, and keeping POS data accurate reflect how inventory should respond to promotions and backorders. Daily sales velocity shows the pace of demand and helps set safety stocks to cover typical fluctuations. Reorder points turn lead time and desired service level into automatic triggers so replenishment happens before stock runs out. Ensuring POS data captures promotions and backorders keeps the forecast aligned with actual demand, preventing surprises from spikes or delays. Together, these steps provide timely visibility and the right timing for replenishment, reducing stockouts and avoiding unnecessary overstock. Ignoring promotions and relying on intuition, reordering only after stockouts, or keeping maximum stock regardless of demand all lead to gaps, missed sales, or higher carrying costs.