Which of the following is a prerequisite for inventory management in retail planning?

Accurate sales forecasting is fundamental to effective inventory management in retail planning because it allows retailers to predict customer demand for products. By understanding anticipated sales, retailers can make informed decisions regarding the amount of inventory to stock. This helps in ensuring that inventory levels are aligned with actual consumer needs, minimizing instances of overstocking or stockouts.

Having accurate sales forecasts enables retailers to optimize their purchasing strategies, manage cash flow more effectively, and reduce waste associated with excess inventory. It also provides insights into seasonal trends and buying patterns, which can further help in planning for promotions and stock rotations.

In contrast, maintaining excess stock can lead to increased holding costs and potential obsolescence of products. While having all products available all the time might seem ideal, it is not feasible or cost-effective. Single vendor contracts may limit flexibility and variety, which can impact a retailer's ability to adapt to changing market conditions. Therefore, accurate sales forecasting is essential for successful inventory management and overall retail planning.