Why is maintaining optimal inventory levels important in logistics?

Maintaining optimal inventory levels is crucial in logistics primarily to prevent excess surplus. When inventory levels are managed effectively, it ensures that there is just the right amount of stock to meet customer demand without overstocking. Excess surplus can lead to increased holding costs, such as storage fees, insurance, and potential obsolescence of goods.

By keeping inventory at an optimal level, logistics operations can streamline costs, reduce waste, and improve overall efficiency. This alignment also enhances responsiveness to market changes and improves customer satisfaction since the right products are available when needed without unnecessary delays. Overall, managing inventory to avoid surplus is a key factor in maintaining a cost-effective and responsive logistics operation.