Forecasting well is actually not an easy task. Even if you produce only what was ordered, those orders can get canceled for many reasons after a manufacturer has made the product but before they got paid. If you don't make enough product to fill orders you are losing sales and if you make too much then you usually have to move it at a much lower margin (this is to enable the reseller to make their required margin on a product with low demand).
Forecasting may start with historical sales but then has to include a bunch of assumptions, especially if it is a brand new product. Other assumptions have to include competitors' market entries, economic factors, growth rate of enthusiast interest, growth rate of distribution outlets, etc. Note that a "growth rate" can be positive or negative in direction.
Usually dumpsters only get filled with discarded prototypes or seized counterfeit product. Otherwise, the product has value and any company trying to stay alive will try to maximize that value. Of course, they have to be careful about moving products through channels that could tarnish the brand and/or set unrealistic expectations by customers (for example, having a lot of product on sale at deep discounts at the end of every season consistently causes customers to expect that every year and then not ever want to buy at full markup).