How is "surplus inventory" best described?

Surplus inventory is best described as excess stock that is not needed for current demands. This means that the quantity of items on hand exceeds what is necessary to meet the needs of customers or business operations at the present time. Recognizing surplus inventory is important for effective material management because it impacts storage costs, cash flow, and overall inventory turnover.

In the context of material management, identifying surplus inventory allows organizations to make informed decisions regarding storage, potential markdowns, or reallocation to avoid waste and optimize resources. Items that fall into this category may be the result of over-purchasing, changes in market demand, or shifts in consumer preferences, indicating a disconnect between supply and current needs.