Gutsaga Technologies

Knowledge — Inventory Problems

How to prevent stockouts — and stop losing the customers behind them

A stockout is rarely one lost sale. Repeat shoppers switch stores after meeting a gap twice, and forecast systems read the zero-sales days as falling demand — ordering even less of the product that just proved too popular.

Why it happens

Out-of-stock history poisons the data

When availability is zero, recorded sales fall even though demand did not. Systems that learn from sales history lower future stock and repeat the same shortage.

The stock often exists — elsewhere

Network totals hide location-level gaps: one store empty, another overstocked on the same SKU. The sale is lost while the company keeps financing the inventory.

Nobody measures the damage

Few companies can say what stockouts cost last month. Lost sales ≈ average daily sales × price for each out-of-stock day — without that number, availability never wins budget discussions.

What good control looks like

Watch stock against a target per SKU-location, with an urgent level that triggers expediting or an emergency order before the shelf is empty

When stock hits zero: expedite incoming orders first, transfer from other locations second, emergency-purchase third

Never let an out-of-stock lower the future target — an out is not evidence of low demand

Track lost sales and lost margin daily, by product and location, and use them in supplier reviews and KPIs

up to 99.5% — product availability achievable; each availability point is roughly 2%+ of sales

Horizon holds every product in an OK zone, escalates through urgent levels while there is still time to act, redistributes before purchasing, and keeps the full day-by-day lost-sales history — something almost no other system records.

Related: Glossary of inventory-flow terms · Horizon vs the alternatives · Value Calculator

Common questions

How much do stockouts really cost?
Manual ordering typically loses up to 20% of sales, forecast-driven ordering up to 12%. Per product: lost sales ≈ average daily sales × price for every day at zero — plus the customers who stop coming back.
Why doesn't buying more stock fix stockouts?
Because most stockouts are imbalance, not shortage: the network holds enough in total but in the wrong locations. Redistribution and location-level targets fix what extra purchasing cannot.

See this on your own data.

The free demo begins with a real simulation on your history — where sales, cash and time are leaking, and what the system would have done instead.

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