Excessive stock is also associated with loss of revenue owing to additional capital bound with the purchase or simply storage space taken.
[3] Excess or unnecessary inventory is listed as one of the seven wastes or "muda" in Taiichi Ohno's Toyota production system.
Excessive stock is typically discarded of in the following ways: returned to the manufacturer or original distributor; liquidated to companies that then resell it on the secondary wholesale or retail market; sold at an extreme discount to existing customers; or sold to salvage companies which then process metals and components of value.
Techniques such as supply chain management and lean manufacturing are intended to avoid the excessive development of inventory.
[1] The initial damage caused by excessive stock is an early exhaustion of cash flow, which leads to the subsequent loss of disposable capital available for investing.