What Is Considered Excess Inventory?
Excess inventory is the extra inventory that a business has beyond what is considered necessary to meet customer demand and fulfill orders. It can be caused by overproduction, inaccurate demand forecasting, slow-moving products, or other factors, and can have a negative impact on a business in terms of storage costs, obsolescence, and lost opportunities for revenue. Effective inventory management is critical to avoiding excess inventory and maximizing profitability.