Stockout Cost Calculator
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Quick Guide to Use this Calculator
- Select your preferred currency from the dropdown.
- Enter the Number of Days Out of Stock (NDOS), Average Units Sold per Day (AUSPD), Price per Unit (PPU), and Cost of Consequence (CC).
- Click the “Calculate” button to obtain the Stockout Cost.
- Use the “Reset” button to clear the input fields and start over.
Note
The Cost of Consequence in the calculator depends on the specific use case. If you primarily deal with finished goods, you may exclude this parameter.
However, if your business relies heavily on the timely availability of raw materials or subassemblies, including the Cost of Consequence could offer a more accurate representation of the financial impact of stockouts.
For example, if you are in the manufacturing industry, or with the production side of the supply chain where raw materials and subassemblies are critical, the Cost of Consequence is highly relevant.
Formula
Stockout Cost =(NDOS×AUSPD×PPU)+CC
NDOS = Number of days out of stock
AUSPD = Average units sold per day
PPU= Price per unit
CC = Cost of consequence
What is Stockout Cost?
Stockout Cost is the financial impact incurred when a product is out of stock, including lost sales and potential customer dissatisfaction.
The formula considers the number of days out of stock, average units sold per day, price per unit, and the cost of consequences.
Who Can Use This Calculator?
Businesses and individuals involved in inventory management, supply chain, and retail can benefit and also financial managers and business owners can benefit from this calculator.
It aids in estimating the financial impact of stockouts on their operations.
Industries That Can Use This Calculator
- Retail
- Manufacturing
- E-commerce
- Distribution
- Supply Chain Management
Benefits of Using This Calculator
- Financial Planning: Helps in planning and budgeting for potential stockouts.
- Optimized Inventory: Enables businesses to optimize inventory levels.
- Risk Mitigation: Identifies and quantifies the financial risk associated with stockouts.
FAQs
Can I use any currency with this calculator?
Yes, you can select your preferred currency from the dropdown.
Is this calculator suitable for small businesses?
Yes, businesses of all sizes can use this calculator for stockout cost estimation.
What is the Cost of Consequence?
The Cost of Consequence includes additional expenses incurred due to stockouts. It pertains specifically to the financial impact incurred when experiencing stockouts of raw materials or subassemblies, rather than finished goods. This includes various expenses associated with disruptions in the production process due to stockouts and penalties for late delivery.
Conclusion
The Stockout Cost Calculator is a valuable tool for businesses to assess the financial implications of stockouts.
By using this calculator, organizations can make informed decisions about inventory management, reduce financial risks, and enhance overall operational efficiency.
