What is a notable advantage of a continuous review inventory system?

A continuous review inventory system is designed to monitor inventory levels consistently and trigger replenishment orders whenever stock falls below a predetermined threshold. This mechanism ensures that businesses have a more accurate and real-time view of their inventory, which significantly mitigates the risk of stockouts.

When inventory levels are continuously monitored, organizations can respond quickly to demand changes or unexpected consumption patterns. By regularly checking stock levels and reordering in response to actual usage, businesses can maintain sufficient inventory to meet customer demands, thereby reducing the likelihood of running out of important items. This proactive approach helps ensure that items are available when needed, ultimately resulting in improved customer satisfaction and operational efficiency.

In contrast, while some choices may touch on relevant aspects such as time management, supplier management, or holding costs, they don't capture the core benefit of a continuous review system as effectively as the reduced stockout risk. Therefore, enhancing inventory visibility and responsiveness to demand changes is the defining advantage of using a continuous review inventory system.