It can be a negative also if say there a sudden spurt of demand in the season and the inventory is not there

For companies, It is always better to keep less inventory with them rather than large Inventory. Inventory means the stock of goods. There are many advantages of keeping less inventory. Few of them are:

1- Lower inventory costs: If you are carrying only less inventory, you don't have to hire a large warehouse or go-down for keeping your stocks.

2- Less losses due to expiry in case of perishable goods.

3- Less pressure on the retailer to give discounts. When there is large stocks in the warehouse, retailer will be forced to give discounts so that he can push sales of the unsold stock.

4- Less inventory can also help in increased sales.

5- Shorter cash to cash cycle: The amount of time required to get the cash spend on purchasing the stock back will be lower is we buy and keep less inventory.