Costs & Risks of Overstocking: Money tied up in inventory could be invested elsewhere in the business, Inventory can go out of date/go off meaning it is wasted, Inventory can go out of fashion meaning that the business may have to write it off as a loss, Additional costs incurred as need somewhere to store the stock, Greater risk of theft, Costs & Risks of Understocking: Production may have to stop, The business' reputation may be damaged, Customers may be dissatisfied if their orders are not fulfilled, No bulk-buying discount, Increased admin & delivery costs if keep needing to re-order,

N5 Business Management - Inventory Control (Costs & Risks of Overstocking & Understocking)

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