How to Calculate Stockout Cost
What is Stockout Cost?
Stockout Cost Calculator helps logistics and supply chain professionals optimize operations and reduce costs.
Formula
Stockout Cost = Lost Sales + Back-order Cost + Customer Loss Value
Step-by-Step Guide
- 1Estimate revenue lost, expedite costs, and LTV impact
- 2Apply the formula with your specific values
- 3Use the result to optimize operations or costs
Worked Examples
Input
$500 lost sales + $100 expedite + $400 LTV loss
Result
Stockout Cost = $1000
Common Mistakes to Avoid
- ✕Using incorrect units or dimensions in the calculation
- ✕Ignoring surcharges and accessorial fees
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