There are several reasons why overstock may occur:
Inaccurate Demand Forecasting: Predicting consumer demand is challenging, and errors can lead to overestimation. Supply Chain Inefficiencies: Delays or disruptions in the supply chain can result in over-ordering to compensate for uncertainties. Seasonal Variations: Products that have seasonal demand may not sell as expected if the season is less favorable. Product Life Cycle: Products that are at the end of their life cycle may not sell as quickly, leading to excess inventory.