Stockouts reduce inventory excesses and increase profits.

Question

Quizplus · Accepted Answer

Stockouts occur when inventory levels are insufficient to meet customer demand, leading to lost sales and customer dissatisfaction. This can decrease profits and harm the company's reputation. On the other hand, excess inventory can tie up cash flow and increase the risk of obsolescence or spoilage. Therefore, it is important for companies to maintain an optimal inventory level to avoid both stockouts and excesses.

Stockouts Reduce Inventory Excesses and Increase Profits