Stockout
Also known as: Stock-out, Out of stock
A stockout is when an item is unavailable because inventory has run down to zero, so demand for it cannot be met.
Stockouts disrupt operations and can be costly — a missing production input can halt a line, and an out-of-stock consumable forces urgent, often overpriced, emergency buying. They usually stem from inaccurate forecasts, long or unreliable lead times, or reorder points set too low.
Businesses guard against stockouts with safety stock, well-set reorder points and reliable suppliers, while avoiding the opposite error of overstocking. Broad, well-supplied catalogues also help: when a preferred item is unavailable, buyers can quickly source a comparable substitute rather than wait.
Frequently asked questions
- What is a stockout?
- A stockout is when an item's inventory reaches zero and demand for it cannot be fulfilled, forcing delays or urgent emergency purchases.
- How do you prevent stockouts?
- Hold appropriate safety stock, set reorder points based on demand and lead time, use accurate forecasting, and work with reliable suppliers who deliver on time.
Related terms
Safety Stock
Safety stock is extra inventory held as a buffer to protect against unexpected demand spikes or supply delays.
Read definitionReorder Point
The reorder point is the stock level at which a new order should be placed to replenish an item before it runs out.
Read definitionFill Rate
Fill rate is the percentage of customer demand that is met from available stock without stockouts or backorders.
Read definitionExplore related across the knowledge graph
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