Question 6
A fast-fashion e-commerce company receives fresh inventory every morning based on the previous day's sales data, keeping almost zero buffer stock. During a surprise viral trend, they run out of a popular dress by noon. Which inventory management approach are they using, and what risk does this scenario illustrate?
FIFO method: risk of selling old stock first
EOQ model: risk of ordering too much at once
Just-In-Time (JIT): risk of stock-out when demand spikes unexpectedly
Par Stock method: risk of overstocking