Glossary /
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.

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