What does wastage refer to in business?

Wastage in business refers specifically to the damage or expiration of stock that must be disposed of. This concept encompasses any loss of materials or products that cannot be sold or used because they are no longer viable for sale or consumption. For example, goods that spoil or become damaged during storage represent a loss that impacts a company's bottom line.

Understanding wastage is critical for businesses as it highlights the need for effective inventory management and quality control measures to minimize losses. Recognizing and addressing wastage can lead to more efficient operations by ensuring that stock levels are optimized and that products are used before they reach the point of expiration.

Other options relate to different aspects of business operations. The sale of expired stock focuses on selling items that should ideally not be sold, which does not align with the definition of wastage. Maximizing production efficiency pertains to optimizing production processes rather than managing losses from expired or damaged stock. Lastly, reducing costs through waste management addresses broader strategies rather than the direct concept of wastage itself.