What is one strategy businesses can use to manage excess inventory?

Managing excess inventory is a critical issue for businesses as it ties up capital and can lead to increased storage costs and potential product obsolescence. Conducting sales promotions or offering discounts is an effective strategy that helps to quickly move surplus stock. By lowering prices, businesses can attract more customers who may be willing to buy items they previously saw as too expensive, thereby clearing out excess inventory efficiently. This approach not only helps in freeing up space in the inventory but can also lead to increased cash flow, which can be reinvested in more desirable products or other business operations.

In contrast, increasing production rates would likely exacerbate the inventory problem by creating even more surplus product. Limiting customer access to products does not address the issue of excess inventory and can negatively impact customer satisfaction and sales. Likewise, reducing marketing efforts would not help to increase sales for the excess inventory; instead, it might decrease overall visibility and interest in the products. Thus, utilizing sales promotions or discounts stands out as the most effective and proactive method for managing excess inventory.