Excess Inventory Holding Costs from Misallocation

$100,000-$250,000 annually (excess specialty retail inventory in distributor warehouses; markdown pressure when export demand is slow; specialized freight requirements for niche products; relationship strain with specialty retailers) • $100,000-$350,000 annually (safety stock carrying costs; price premium from emergency expedites; supplier quantity minimums force overbuying; supplier lead time buffers result in excess raw materials) • $100,000–$250,000 per year from carrying excess finished goods tied to the wrong dealer segment, idle capital in overproduced SKUs, and unplanned line changeovers driven by last-minute reallocation decisions.

Allocates based on 'last year's shipment' to specialty retailers; relies on quarterly emails from specialty retailers with updated demand; tracks export shipments manually; cannot adjust mid-shipment; holds excess specialty retailer inventory domestically and sells at markdown when export demand is slow • Allocates conservative minimums to online channels due to demand unpredictability; excess inventory sits in offline warehouses while online channels stock-out; manual daily checks of online inventory levels; emergency transfers when online marketplaces cry 'stock-out' (cost: logistics + expedite fees) • Allocates conservatively to export to account for lead time uncertainty; ships excess to big box retailers domestically instead (markdown pressure); manually tracks tariff/currency changes in spreadsheets; coordinates export logistics via email and phone; cannot adjust shipment quantities mid-transit