Inventory is a delicate balancing act. The key is having the right inventory and the right amount. Too much, and profit drains from your business. Additional results of too much inventory include potential uselessness and crowded warehouses that lead to high carrying costs and even damaged materials.
However, too little inventory and you lose sales. Too little causes unhappy customers when deliveries are late, expensive unplanned downtime when parts aren’t available, excessive premium freight charges and high product costs.