Which principles help reduce product costs by managing inventory?

The principle that helps reduce product costs by managing inventory is Just-in-time (JIT). JIT is a production strategy that emphasizes the reduction of inventory carrying costs by receiving goods only as they are needed in the production process. This approach minimizes waste and decreases the amount of capital tied up in inventory. By synchronizing production schedules with demand, JIT ensures that materials and components are available just in time for manufacturing, which leads to lower inventory levels and reduced costs associated with storage and obsolescence.

Lean manufacturing, while focused on increasing efficiency and eliminating waste in all forms, is broader and not solely focused on inventory management. Six Sigma aims to improve quality by identifying and removing causes of defects, thus enhancing processes but not specifically targeting inventory cost reduction. Agile methodology, primarily used in software development, emphasizes flexibility and quick responses to changes, but it does not specifically address inventory management in the context of product costs.