Stockout Rate#
The frequency with which an item is out of stock.
Important
✨ AI-generated content. This page was written with the assistance of an AI language model and is provided as a learning aid. Despite careful review, it may still contain mistakes, omissions, or out-of-date information. Whether you are new to the topic, a team lead, or a senior practitioner, treat it as a starting point rather than an authoritative reference: read it critically and independently verify anything you act on (code, commands, figures, and factual claims) against official documentation and primary sources before relying on it.
What it is#
Stockout Rate is a supply-chain and inventory metric measuring how often items are out of stock when there is demand — the percentage of demand that could not be filled because the product was unavailable. It is a direct reading of service-level performance: a low rate means shelves stay stocked, a high rate means customers keep hitting empty ones.
The formula#
It is computed by demand or by orders,
or, order-based, the share of orders that hit at least one stockout.
A worked example#
A month’s demand is 1,000 units; inventory covers 950 and 50 go unfilled. The stockout rate is 50 / 1,000 = 5% — one order in twenty meets an empty shelf.
Why it matters, and reducing it#
Frequent stockouts push customers to competitors, forfeit sales, and flag weak forecasting, so the metric captures the tension between service level and holding cost. It falls with better demand forecasting (ARIMA, Prophet, LSTM), adequate safety stock, shorter vendor lead times, multi-location inventory and real-time tracking. It is the exact complement of the fill rate.
Theme: Operations & Supply Chain · All terminology
Hint
Mind map — connected ideas
Fill Rate · Backorder Rate · Lost Sales Value · Safety Stock · Ops Health Dashboard · Prophet — Time Series Forecasting by Facebook (Meta)
Hint
More in Operations & Supply Chain
Backorder Rate · Crew Overtime · Demand Forecasting · Fill Rate · Long Lead Times · Long-Tail Items · Lost Sales Value · Overstock % · Real-Time Inventory Tracking · Reorder Point (ROP) Optimization · Safety Stock · SKU · Slow-Moving SKUs · Stockouts
See also
Source article Adapted (context, re-expressed) in our own words from: Stockout Rate (insightful-data-lab.com).