Stockout costs

Stockout costs is costs that result when a company runs out of a particular item for which there is customer demand. The company must act to meet that demand or suffer the costs of not meeting it.

Definitions

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Stockout costs. Costs that result when a company runs out of a particular item for which there is customer demand. The company must act to meet that demand or suffer the costs of not meeting it.