# Inventory Stockout Cost Calculator

> Estimate what running out of stock costs: units short, profit lost on customers who walk away and the extra cost of backorders.

Category: Commerce & retail · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/inventory-stockout-cost-calculator

When an item is out of stock some customers wait and some leave. The cost is the profit lost on those who leave plus the extra cost of serving those who wait.

Also called: Out-of-stock cost calculator, Lost sales calculator.

## Inputs
- Average daily demand (unit units/day; default 40)
- Days out of stock (unit days; default 5)
- Share of demand lost (not backordered) (unit %; default 60)
- Profit per unit sold (default 12)
- Extra cost per backordered unit (default 3; optional)
- Other one-off costs (default 0; optional)
- Currency

## Results
- Cost of the stockout
- Units of demand missed
- Units lost for good
- Units backordered
- Lost profit
- Backorder cost
- Cost per day out of stock

## Formula

```
Units short = Demand × Days;  Lost profit = Units short × Lost% × Unit profit;  Backorder cost = Units short × (1 − Lost%) × Extra cost;  Total = Lost profit + Backorder cost + Other
```

Where:
- Lost%: share of customers who buy elsewhere instead of waiting
- Unit profit: contribution per unit sold

## Worked example
1. Units short = 40 × 5 = 200.
2. Lost: 200 × 60% = 120 units × 12 = 1,440.
3. Backordered: 80 units × 3 = 240.
4. Total = 1,440 + 240 = 1,680, or 336 a day.

**Result:** Five days out of stock costs about 1,680: 1,440 of lost profit and 240 of backorder handling.

## What the result means

Compare the cost per day with the carrying cost of the extra safety stock that would have prevented it. If a week of extra stock costs less to hold than one day out of stock, hold more.

## Assumptions and limits
- Demand during the stockout equals normal average demand.
- Customers who leave do not return later for this purchase.
- Longer-term effects, such as customers who never come back or lower marketplace ranking, are only captured if you add them as other costs.

## Questions

### How do I estimate the share of sales lost?

Look at past stockouts: compare backorders taken with normal demand for the same period. The gap is roughly the lost share.

### Why use profit rather than revenue?

If the sale had happened you would also have paid for the goods, so only the margin is actually lost.

## Related calculators
- [Inventory Carrying Cost Calculator](https://calculators.geekmidst.com/calculators/inventory-carrying-cost-calculator)
- [Sell-Through Rate Calculator](https://calculators.geekmidst.com/calculators/sell-through-rate-calculator)
- [Profit Margin Calculator](https://calculators.geekmidst.com/calculators/profit-margin-calculator)

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/inventory-stockout-cost-calculator