Under/Over Stocking

What is this a consequence of?

Unexpected orders are not met or turned down, because the business can’t produce the products on time

• Over Stocking

• Under Stocking

What is this a consequence of?

Company may have to place orders with suppliers more often, and this may make them lose bulk buying discounts

• Over Stocking

• Under Stocking

What is this a consequence of?

There is a higher risk of stock being stolen

• Over Stocking

• Under Stocking

What is this a consequence of?

It costs money to store stock (e.g. warehouse costs, security staff, electricity)

• Over Stocking

• Under Stocking

What is this a consequence of?

Production might stop if the business runs out of raw materials to make what they need

• Over Stocking

• Under Stocking

What is this a consequence of?

If social factors (fashion/trends) change, the business will not be able to sell the stock for what it is worth/ wasted completely

• Over Stocking

• Under Stocking

What is this a consequence of?

Higher risk that stock goes out of date, rendering it worthless

• Over Stocking

• Under Stocking

What is this a consequence of?

Money is tied up in stock doing nothing, when it could be used for other purposes (cash flow issue)

• Over Stocking

• Under Stocking

What is this a consequence of?

Customers might not receive their products on time, causing them to be unhappy

• Over Stocking

• Under Stocking

What is being described:

Not having enough stock to fulfil orders or continue production

• Over Stocking

• Under Stocking