Stockout Rate

The share of items or item-locations that were out of stock during the period.

Stockouts convert directly into lost sales, substitutions and eroded customer trust, and they are usually concentrated in a small set of items.

Across 1,000 SKUs over 30 days, 900 stocked-out SKU-days = 3% stockout rate.

Weight by demand value. A 3% rate concentrated in A items is far worse than 3% spread across slow movers.

Segment items, set service targets and safety stock by segment, and shorten replenishment lead time on high-value items.

Measuring on-hand at month end only, which misses stockouts that occurred and were resolved mid-month.