The Effects of Too Little Stock

There can be problems with holding too little stock:

• The business might be unable to cope with unexpected increases in demand and therefore lose customers.
• If deliveries are delayed the business may run out of stock and have to halt production, which can lead to workers and machinery being idle.
• The business might be unable to cope with unexpected shortages of materials.
• The business will be unable to take advantage of discounts given for bulk buying.