Stockout Cost Calculator
Quantify the margin and goodwill lost when demand arrives and stock is unavailable.
About Stockout Cost Calculator
Only the portion of demand that is genuinely lost — rather than merely delayed — costs margin. A further allowance is added for customers who never return, valued at roughly three future orders of contribution. Stockout cost is systematically underestimated because the permanent customer loss never appears in any report, which is why safety stock always looks too expensive.
Formula
Stockout Cost
Cost = demand × days × share lost × contribution, plus an allowance for permanent customer loss
- share lost
- Demand that goes to a competitor rather than waiting for restock
Worked example
With the default values below, Stockout Cost Calculator returns Total Cost of the Stockout of $8,078.40. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Daily demand in unitsminimum 0
- 120
- Days out of stockminimum 0 days
- 5 days
- Contribution per unitminimum 0
- 22
- Share of demand lost rather than delayedaccepts 0–100 %
- 45 %
- Share of lost customers who never returnaccepts 0–100 %
- 12 %
Results
- Total Cost of the Stockout
- $8,078.40
- Units of Demand Lost
- 270
- Immediate Margin Lost
- $5,940.00
- Estimated Future Value Lost
- $2,138.40
- Cost per Day Out of Stock
- $1,615.68
Step by step
- 1Values used
- 2Stockout Cost
- 3Total Cost of the Stockout= 8,078.40
- 4Units of Demand Lost= 270
- 5Immediate Margin Lost= 5,940.00
- 6Estimated Future Value Lost= 2,138.40
- 7Cost per Day Out of Stock= 1,615.68
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Stockout Cost calculated?
Cost = demand × days × share lost × contribution, plus an allowance for permanent customer loss Only the portion of demand that is genuinely lost — rather than merely delayed — costs margin. A further allowance is added for customers who never return, valued at roughly three future orders of contribution.
Why does Stockout Cost matter?
Stockout cost is systematically underestimated because the permanent customer loss never appears in any report, which is why safety stock always looks too expensive.
What values do I need to enter?
This calculator takes 5 inputs: Daily demand in units, Days out of stock, Contribution per unit, Share of demand lost rather than delayed, Share of lost customers who never return. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.