Stockout Cost Calculator

About this calculator

A stockout — running out of inventory while demand still exists — costs more than the lost sale itself. It represents lost profit margin on units that couldn't be sold, and often ripples further into lost customer goodwill, rush-shipping costs on backorders, or customers who buy from a competitor instead and don't come back. Inventory managers treat stockout cost as the counterweight to holding cost: carry too little stock and you pay in lost sales; carry too much and you pay in storage and obsolescence.

This calculator estimates the lost-profit cost of a stockout from your unit margin and the quantity of demand you couldn't fill. It's used alongside reorder-point and safety-stock calculations to justify holding a bit more buffer inventory — the stockout cost this calculator surfaces is often the number that makes a slightly higher holding cost worth paying.