What triggers the establishment of adjusted stock levels?

The establishment of adjusted stock levels primarily occurs in response to inadequate demand levels or consumption. This situation arises when historical data indicates that the current level of inventory is not aligning with the rate of product demand. When consumption falls short of what has been anticipated, it signals a necessity to adjust the stock levels accordingly to avoid excess inventory costs, which can tie up capital and storage resources.

Adjusting stock levels based on demand ensures that inventory management remains efficient and responsive to market needs. It helps minimize waste and optimize stock to meet actual consumption patterns rather than historical averages or overestimated future demand. Inaccurate forecasting can lead to misaligned stock levels, hence the need for adjustments based on real, observed data regarding how much of a product is being consumed over a given period.