What inventory management strategy helps reduce costs associated with maintaining a large inventory?

Just-In-Time (JIT) is an inventory management strategy designed to minimize the costs associated with holding large amounts of stock. JIT focuses on receiving goods only as they are needed in the production process, thereby reducing the amount of inventory that needs to be stored and managed. This approach allows manufacturers to decrease warehousing costs, reduce waste due to overproduction, and improve cash flow since funds aren't tied up in excess inventory.

By implementing JIT, companies can streamline their operations and make them more responsive to customer demand, which leads to efficiency in production and delivery. This strategy hinges on strong supplier relationships and precise planning to ensure that materials arrive at the right place and time, preventing delays in production schedules while keeping inventory levels low.

While the other strategies listed may also contribute to cost reduction and efficient inventory management, none focus as specifically on minimizing inventory levels as JIT does. Inventory turnover measures how quickly inventory is sold or used over a period, lean manufacturing emphasizes overall waste reduction, and safety stock management involves maintaining a buffer of inventory to guard against unforeseen demand, which can counteract the goal of minimizing inventory.