What is one outcome of inadequate management of demand variability?

Inadequate management of demand variability can lead to potential lost sales due to stockouts. When a company cannot accurately forecast or respond to fluctuations in customer demand, it may not have the right amount of inventory available at the right time. This mismatch can result in stockouts, where products are unavailable for purchase. Customers may turn to competitors in these situations, leading to lost sales and potential long-term damage to the business's reputation. Effective demand management is vital for ensuring that inventory levels adequately meet customer needs, thereby preventing stockouts and preserving sales opportunities.

The other options reflect outcomes that typically arise from effective demand management rather than the consequences of inadequate management. Improved customer relations, increased supply chain visibility, and reduced operating expenses are generally positive results of well-executed supply chain strategies, contrasting with the risks posed by insufficiently managing demand variability.