Excess Inventory

Excess Inventory

Also referred to as surplus inventory, denotes the surplus stock held by a company beyond what is necessary to meet demand and safety stock requirements.

While maintaining a certain level of excess inventory can serve as a buffer against unexpected spikes in demand, excessive surplus inventory can pose significant challenges for businesses. These challenges include increased storage costs, tied-up capital, risk of obsolescence, and potential disruptions to cash flow and operations.

Related Terms

Baseline Sales

Amount of organic sales for a product in a marketplace without any marketing effort.

Horizontal Merchandizing

A retail display technique where products are arranged in a left-to-right manner along a horizontal plane.