Explore BrainMass

Explore BrainMass

    Stock out cost determination

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need to determine stockout cost for a problem but don't think I have enough information.

    40 percent of stockouts will result in a back order with a cost of $5.00 per back order; 40 percent of the stockouts result in a lost sale and a profit of $50.00 per unit; and 20 percent of the stockouts result in a lost customer and with an extimated loss of $100.00.

    © BrainMass Inc. brainmass.com March 4, 2021, 8:28 pm ad1c9bdddf
    https://brainmass.com/business/finance/stock-out-cost-determination-170925

    Solution Preview

    Hi,

    Please see response to your posting as detailed out below.

    There are three probable outcomes of a stockout situation.
    1. Backorder with $5.00, sort of penalty.
    2. Lost sale with profit loss of $50.00, which is ...

    Solution Summary

    The solutions contains calculations of stock out cost.

    $2.49

    ADVERTISEMENT