Stockout Cost Calculator accuracy and testing

Formula source

• Stockout cost = lost units * contribution margin per unit + expedite cost + admin hours * labor cost per hour + reputation allowance.

Test cases

Known limitations

• These calculators do not forecast demand automatically, fetch live provider rates, optimize warehouse layout, model taxes, or replace review of your contracts, carrier invoices, WMS data, accounting policies, or operations plan.

Assumptions

• All demand, service, storage, labor, packaging, shipping, software, and handling values are user-entered assumptions.
• No current carrier rates, 3PL fee cards, marketplace rules, or provider-specific costs are hardcoded.
• Results are deterministic planning estimates and are not operations, accounting, tax, legal, or carrier-contract advice.
• Calculations run locally in the browser without uploading private inventory, customer, order, or warehouse data.

Unit handling

• Lost Units accepts values in units.
• Contribution Margin per Unit accepts values in $.
• Expedite or Recovery Cost accepts values in $.
• Admin Hours accepts values in hr.
• Labor Cost per Hour accepts values in $/hr.
• Reputation or Recovery Allowance accepts values in $.
• Estimated Stockout Cost is displayed as currency.
• Lost Contribution Margin is displayed as currency.
• Admin Labor Cost is displayed as currency.

Rounding rules

• Number displays use up to 2 decimal places in the calculator UI.
• Currency outputs are displayed with standard US dollar formatting.
• Input precision follows configured step values where provided.

Version history

Change log