Why is inventory management important for Uniqlo?

Inventory management is crucial for Uniqlo as it ensures product availability while minimizing surplus inventory, which helps keep costs down. Efficient inventory management allows the company to align stock levels with customer demand, ensuring that popular items are readily available for purchase. This responsiveness to customer preferences is essential in the fast-paced fashion industry, where trends can change rapidly.

By keeping track of inventory levels accurately, Uniqlo can avoid overstocking situations that lead to excess merchandise, which may require markdowns and negatively impact overall profitability. Adept management of inventory helps optimize supply chain operations, reduce waste, and manage cash flow more effectively. This balance is vital for maintaining profitability and competitiveness in the retail market.

In contrast to other choices, increasing the product range significantly could lead to complexities in managing inventory if not executed properly. Unnecessarily stockpiling products would contradict the goals of effective inventory management. Finally, while color decisions for new collections are significant, they are not directly linked to the overall efficiency and cost-effectiveness of inventory control.