Businesses need to be aware of the disadvantages of having too much inventory.
Having too much inventory is better than having no inventory, as this would prevent any production. Overstocking has the benefit that it allows a business to meet any unexpected orders. But as a rule it makes financial sense for businesses to keep down the amount of stock they hold.
Having too little inventory is obviously a potential disaster for any business. Customers expect their orders to be made and delivered as agreed.