ECONOMICS

Detailed explanation-1: -What are stockout costs? Stockout costs is the capital lost from inventory that has become unavailable for the customer to purchase. When a customer cannot buy something because it is not in stock, the business loses money.

Detailed explanation-2: -Stockout Costs The consequence of a stockout is a missed sales opportunity. Stockout cost refers to the total expense of an inventory shortage including lost revenue. A stockout can be especially harmful to your business if the shopper is a first-time customer.

Detailed explanation-3: -In ecommerce fulfillment a stockout occurs when customer orders for a product exceed the amount of inventory that is available on hand. This usually happens when demand for products is higher than expected, and the amount of inventory and safety stock is too low to fill all orders.

Detailed explanation-4: -Stockouts are what happen when you run out of inventory of a particular item. An out-of-stock can happen anywhere in the supply chain, but it impacts retailers’ shelves and profits the most when it occurs as the customer is about to purchase.