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Demand planning functionalities are crucial for managing inventory in NetSuite because they provide tools that help organizations assess their future inventory needs based on historical data, trends, and forecasts. This feature enables businesses to optimize stock levels, mitigate stockouts, and reduce excess inventory, thus ensuring that products are available when needed without over-investing in stock.

Effective demand planning involves analyzing customer demand patterns and adjusting inventory accordingly, which is a core aspect of inventory management. It facilitates collaboration among various departments, such as sales, marketing, and finance, ensuring that inventory decisions align with broader company objectives.

The other choices may support aspects of inventory management but do not directly provide the comprehensive inventory oversight that demand planning functionalities offer. Order management systems, for instance, ensure the efficient processing of orders but might not directly influence inventory levels. Employee engagement tools focus on workforce productivity and collaboration, while custom coding capabilities relate to tailored solutions rather than specific inventory management processes.