Stockout Cost Calculator

Use this calculator to estimate stockout cost.

What this calculator does

The stockout cost calculator helps estimate the profit lost when inventory is unavailable.

It is useful for:

• inventory risk analysis
• profitability review
• stock planning
• service level decisions

Formula

Stockout Cost = Lost Sales Units × Profit Per Unit

Where:

• Lost Sales Units = units you could not sell due to stockouts
• Profit Per Unit = profit earned on each unit
• Stockout Cost = estimated lost profit from the stockout

Example calculation

If:

• Lost sales units = 80
• Profit per unit = 25

Then:

• Stockout cost = 80 × 25
• Stockout cost = 2000

What is stockout cost?

Stockout cost is the estimated profit lost because you did not have enough inventory to meet demand.

Why stockout cost matters

This calculation helps businesses:

• understand inventory risk
• justify better stock planning
• evaluate stock buffer decisions
• measure missed profit

When to use this calculator

Use this calculator when you want to:

• estimate stockout impact
• review missed sales
• justify safety stock
• improve forecasting

Common mistakes

Common mistakes include:

• using revenue instead of profit
• underestimating lost sales units
• ignoring repeat customer loss
• focusing only on direct cost

Stockout cost vs carrying cost

These are closely related.

• Stockout cost measures lost profit from not enough stock
• Carrying cost measures the cost of holding too much stock

Related calculations

You may also want to use:

• Safety Stock Calculator
• Inventory Carrying Cost Calculator
• Reorder Point Calculator

FAQs

What does this calculator do?

It helps you estimate stockout cost.

Why is this important?

It shows the profit impact of running out of inventory.

Does this include long-term customer loss?

No. This version focuses on direct lost profit only.