Just-in-time inventory management is a strategy that businesses use to reduce inventory costs. Businesses that employ this strategy maintain low inventory levels and only order more goods from their suppliers when needed.
For example, a computer repair business typically doesn’t keep a lot of parts in inventory. When a customer brings in a computer for repair, it examines the computer and orders the required parts to perform the repair from the supplier.
The advantages of this inventory management strategy are that businesses can keep their inventory costs low and eliminate the need to rent extra space to store inventory. The main disadvantage of this strategy is that businesses rely heavily on their suppliers to supply the products they need on time.