4,500 is the example result. Read it using the units and relationship stated below.
Stockout Cost uses units missed, contribution margin per unit.
Balancing availability against cash tied up in stock
For stockout cost, the relationship is Result = [Units missed] × [Contribution margin per unit]. The amount depends on the supplied units missed, contribution margin per unit, rather than a live market price or a value imported from another record. An inventory decision must connect demand, lead time and the cost of holding goods. Buying more can reduce ordering frequency but ties up cash and storage. A stock ratio is useful only when its demand period is clear.
What the model includes
Result = [Units missed] × [Contribution margin per unit] Use purchase and sales records from a comparable period. Separate regular consumption from a promotion or one-off order; otherwise a reorder assumption can carry a temporary spike into the next purchasing cycle. Check supplier pack sizes, minimum quantities and delivery reliability before turning a calculated amount into an order. The model does not measure deterioration, seasonality or the cost of a stockout unless those inputs are present.
Example with the supplied inputs
Units missed: 150; Contribution margin per unit: 30. Result: 4,500. The values are illustrative.
Compare one changed input
Units missed changes from 150 to 165. The result becomes 4,950. All other inputs remain fixed.
Calculation rule
Result = [Units missed] × [Contribution margin per unit]
Inputs and output
| Input | Example value | Entry convention |
|---|---|---|
| Units missed | 150 | Use the source quantity represented by units missed. Keep the counted population fixed and avoid mixing a unit value with a period total. |
| Contribution margin per unit | 30 | Use the source quantity represented by contribution margin per unit. Keep the counted population fixed and avoid mixing a unit value with a period total. |
Output: 4,500 is the example result. Read it using the units and relationship stated below. Use the formula to distinguish a cash amount, count, percentage or ratio.
How to use the page
Collect the inputs
Gather Units missed, Contribution margin per unit. Use one period and the units shown in the form.
Run the calculation
Enter the values and select the action. The calculation rule above explains how the inputs produce the result.
Compare a scenario
Change Units missed on its own, keeping the other inputs fixed. Read both results before changing another assumption.
Worked example
With the example inputs listed above, the result is 4,500.
Change Units missed from 150 to 165 while keeping every other value fixed. The result becomes 4,950. This comparison isolates that input; it does not forecast how other variables will respond.
Check the stated formula, units and limits before using the result in a decision.
Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.
Content updated: October 11, 2026