ECONOMICS

Detailed explanation-1: -Not having enough in-stock can result in delayed shipments and lost sales, and too much stock can increase storage costs as well as the chances that product deterioration occurs, according to the Houston Chronicle.

Detailed explanation-2: -The most obvious consequence of stockouts is lost revenue. If a customer goes to place an order and the item is out of stock, you lose the profit of that sale. Shoppers may opt for cheaper products. Or even worse, you may lose a customer forever, which means less recurring sales in the future.

Detailed explanation-3: -Not only do they lead to lost sales, but out-of-stocks also result in reduced customer satisfaction and lower loyalty levels. Shoppers often feel let down when you don’t have what they’re looking for, and the last thing you want is to disappoint customers.

Detailed explanation-4: -A Lost Sale occurs when you have a customer demand for a part and you do not have the part in stock. The customer can’t wait for the part to be ordered or you can’t procure the part from a local source in a quick timely manner. The customer decides to go elsewhere to buy the part. You lost the sale.