LogFAQs > #942038113

Overproducing is costly. You have to up to set up more infrastructure in your manufacturing centers and hire more workers. In addition, you need more warehouse space for both components and finished products, and it's often not just one warehouse. There's usually tons of distribution centers, and if you want low response time at all stores, you're going to have higher inventory costs at each of these stores. Companies also don't want their money to be tied up in inventory sitting in the warehouse because it's not doing as much for them there as in RD and other avenues.

That's not to say that it's always worse to overproduce. It's just something companies need to balance around.