Imagine you have orders for 100,000 units, but you produce 150,000. What do you do with the unsold units? More than likely, you’ll have to warehouse them, which means additional expenses for building space, staff, and equipment. Inventory overages are terribly inefficient.
Forecasting your inventory needs using historical data and current orders will help you produce just what you need, and no more. The closer you can match inventory levels to demand, the more efficient your manufacturing and logistics operations will be.
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