inventory surplus

An inventory surplus occurs when a business has more stock or products on hand than it can sell within a reasonable time frame. This can result from overestimating demand, slowing sales, or increased production. While having sufficient inventory is important for meeting customer needs, excess stock can tie up capital, lead to storage costs, and risk obsolescence if products become outdated or spoilable. Managing inventory levels effectively helps balance supply with consumer demand, minimizing surplus and optimizing operational efficiency.