What is dead stock and how should it be managed?

• A. Inventory that isn’t moving; try promotions or discounts and adjust future orders to prevent buildup.
• B. Inventory that expires immediately after arrival.
• C. Inventory that never leaves the warehouse due to theft.
• D. Inventory that is used for internal operations only.

Answer: (A)

Dead stock is inventory that isn’t moving, tying up capital and shelf space with ongoing carrying costs. The best way to manage it is to move it out through promotions or discounts and to adjust future orders so the stock buildup doesn’t happen again. This approach directly addresses the immediate loss by freeing up space and recovering value, while changing forecasting and purchasing practices helps prevent similar slow-moving items from piling up in the future. In practice, you’d look at sales data to spot slow movers, run clear-out promotions or bundle deals, and then revise order quantities, safety stock, and demand forecasts to reflect actual demand and seasonal patterns. The other descriptions don’t fit because dead stock isn’t necessarily perishable, isn’t caused by theft, and isn’t intended for internal use.