over investment in inventory

Why Does Over Investment in Inventory Occur?

Several factors can contribute to over investment in inventory:
Poor Forecasting: Inaccurate demand forecasting can lead to excessive inventory.
Bulk Purchasing: Discounts on bulk purchases may encourage businesses to buy more than needed.
Uncertain Supply Chains: To buffer against supply chain disruptions, companies might stockpile inventory.
Seasonal Fluctuations: Businesses might overestimate the impact of seasonal demand spikes.

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