What are the potential consequences of overproducing in BSG?

Overproducing in the Business Strategy Game can lead to significant consequences, with excess inventory costs and potential write-offs being a primary concern. When a company produces more products than it can sell, it results in an accumulation of unsold inventory. This excess inventory can incur various costs, including storage, handling, and potential markdowns if products must be sold at a discount to clear inventory. Additionally, if the inventory becomes obsolete or perishable, businesses may face write-offs, which can greatly impact profitability and overall financial performance.

In contrast to the correct option, the other choices suggest outcomes that do not directly correlate with the implications of overproduction. While higher customer satisfaction and loyalty, increased market share, and reduced production costs may sound beneficial, they are unlikely to be realistic results of overproducing. Instead, overproduction typically detracts from these benefits, as it can lead to financial strain and operational inefficiencies. Therefore, the consequences of overproducing are predominantly negative, impacting the company’s ability to respond to market demand effectively.