Optimizing Inventory Management for Seasonal Businesses: Safety Stock and Reorder Point Strategies
Highly seasonal businesses face a unique inventory challenge: demand volatility concentrated into a short peak window. Applying a single safety stock and reorder point year-round often leads to excess inventory during off-peak months and unnecessary carrying costs. A seasonally adjusted approach, using separate planning parameters for peak and non-peak periods, aligns inventory levels more closely with actual demand patterns, improving service levels during high season while protecting cash flow the rest of the year.