What is considered "excess supply"?

Excess supply refers to inventory that surpasses the demand or requirements of an organization, in this case, the Navy. This situation arises when the amount of products or materials stored exceeds what is actually needed for operations or strategic goals. Understanding this concept is crucial for effective inventory management, as it can lead to increased holding costs, potential waste, and inefficiencies in logistics operations.

When there is excess supply, it can indicate either a forecasting error or fluctuations in demand that were not anticipated. Managing excess supply is essential for maintaining an efficient supply chain and ensuring that resources are allocated effectively. This approach helps the Navy avoid issues related to overstocking and frees up resources that can be redirected to meet actual needs.