Over runs, in the context of business or production, refer to the excess or surplus of materials, goods, or inventory beyond the anticipated or required amount. It usually occurs when the production or procurement quantities exceed the actual demand or consumption. Over runs can occur in various industries, including manufacturing, construction, retail, and services.
In manufacturing, over runs can refer to the surplus production of goods or items beyond the intended order quantity. For example, if a company expects to produce and deliver 1,000 units of a product but ends up producing 1,200 units, the extra 200 units can be classified as over runs.
Similarly, in construction projects, over runs can relate to the surplus delivery or installation of construction materials, equipment, or fixtures. This surplus may arise due to estimation errors, changes in project specifications, or simply overestimating quantities required.
Over runs can pose challenges for businesses, as they tie up capital, consume storage space, and may lead to additional expenses, such as warehousing, maintenance, or obsolescence. Consequently, businesses often aim to minimize over runs by conducting accurate demand forecasting, optimizing production or procurement planning, and enhancing inventory management practices.
Overall, over runs are the surplus or excess quantity of materials, goods, or inventory that goes beyond the expected or required amount in business or production processes.
