What strategy should a business implement to maintain optimal inventory levels?

Implementing an inventory management system is essential for maintaining optimal inventory levels because it provides businesses with the tools and processes necessary to monitor stock levels in real time. Such systems facilitate accurate tracking of inventory, streamline reordering processes, and help in forecasting future inventory needs based on historical data and sales trends.

A well-implemented inventory management system allows businesses to analyze patterns of demand, thereby reducing the likelihood of stockouts or overstock situations. This kind of system can automate various aspects of inventory management, improving efficiency and helping companies respond quickly to changes in demand.

While utilizing seasonal sales forecasts can aid in understanding demand fluctuations, it doesn't provide the comprehensive control and monitoring that an inventory management system offers. Increasing warehouse storage space may accommodate more inventory, but it does not address the need for better data management and analysis to keep inventory levels optimal. Outsourcing inventory management can also be effective, but it introduces additional complexities and may not be suitable for all businesses. Thus, the most effective strategy for maintaining optimal inventory levels focuses on the implementation and use of an inventory management system.