What is the inventory strategy where stock is purchased as needed rather than kept in excess?

The correct answer is the strategy referred to as "Just in Time" (JIT). This inventory management approach emphasizes minimizing inventory levels by purchasing and producing only as needed to meet customer demands. The primary objective of JIT is to reduce waste and increase efficiency by ensuring that materials and stock arrive exactly when they are required in the production process, thus keeping inventory levels low.

By implementing a JIT strategy, companies can save on storage costs, reduce the risk of obsolete stock, and improve cash flow, allowing them to allocate resources more effectively. This method is particularly beneficial in environments where demand can be unpredictable, as it enables businesses to be more responsive and flexible.

The other inventory strategies mentioned do not focus specifically on purchasing stock as needed. Batch production involves producing items in groups or batches, which may lead to excess stock being created. Continuous flow refers to a process where materials are continuously processed without interruption, which could lead to overproduction. Lean manufacturing encompasses various principles aimed at reducing waste and increasing efficiency but does not solely focus on the timing of inventory purchases.