Inventory Optimization is the process of managing a company's inventory levels to ensure that the right amount of stock is available at the right time. This helps businesses meet customer demand without overstocking or understocking, which can lead to lost sales or increased holding costs. Effective Inventory Optimization involves analyzing sales data, forecasting demand, and adjusting inventory accordingly. Techniques such as Just-in-Time (JIT) inventory and ABC analysis can be used to streamline operations and improve efficiency, ultimately enhancing profitability and customer satisfaction.