JIC is an inventory strategy in which firms retain big inventories on hand just in case. This inventory management approach seeks to reduce the likelihood of a product selling out of stock. This technique usually results in a company’s inability to forecast consumer demand or big spikes in demand at unpredictably inconvenient periods.
This technique entails a firm incurring greater inventory holding expenses in exchange for a decrease in the number of sales lost due to sold-out inventory.
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Just in case (JIC) is an inventory strategy where companies keep large inventories on hand
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This strategy minimizes the probability that a product will sell out of stock
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A company that uses this strategy typically has difficulty predicting consumer demand or experiences large surges in demand at unpredictable times
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The main disadvantage of this strategy is higher storage costs and wasted inventory if all stock does not sell
An example of JIC buyers are the military or hospitals. These types of organizations must maintain large inventories because waiting for JIT producers to ramp up production for needed supplies may result in lost lives and even wars.