Why is it easier to avoid stock issues at a store when using a distribution center?

The correct answer, which is that merchandise is ordered as needed, highlights the importance of efficiency in inventory management when using a distribution center. Distribution centers serve as a centralized hub where goods can be stored before being distributed to various retail locations. By adopting a just-in-time ordering approach, stores can significantly reduce the risk of overstocking or understocking.

When merchandise is ordered as needed, it allows retailers to maintain lower levels of inventory at the store level, which minimizes the chances of stock issues. This flexibility ensures that the inventory on hand aligns closely with current consumer demand. Additionally, utilizing a distribution center enables stores to quickly replenish stock based on real-time sales data and inventory levels, thus avoiding instances where products are unavailable due to unexpected demand fluctuations.

In contrast, while pre-ordering for seasonal changes, daily shipments from manufacturers, and conducting frequent inventory checks all serve important functions, they do not inherently provide the same level of flexibility and responsiveness as ordering based on actual need. Pre-ordering might lead to excess stock if the demand does not match predictions, daily shipments may not align with current inventory management needs, and frequent checks, while important for awareness, do not prevent stock issues by themselves. Therefore, ordering as needed through a distribution center is the