# Stock Out Probability Calculator

## Unit Converter ▲

## Unit Converter ▼

From: |
To: |

Powered by @Calculator Ultra

## Find More Calculator**☟**

### Stock Out Probability Formula

The stock-out probability (\(P_S\)) is calculated by the following formula:

\[ P_S = \frac{E_S}{E_D} \times 100 \]

where:

- \(P_S\): Probability of a stock out (in percentage)
- \(E_S\): Number of expected stock outs
- \(E_D\): Number of expected demand requests

### Example Calculation

If a business expects 25 stock outs and anticipates 100 demand requests, the probability of a stock out is calculated as follows:

\[ P_S = \frac{25}{100} \times 100 = 25\% \]

### Common FAQs

**1. What is a Stock Out Probability?**

- The stock-out probability measures the likelihood that a product will not be available when a customer places an order. A low probability indicates that the inventory level is sufficient to meet demand, while a high probability suggests a potential inventory shortage.

**2. How can I reduce the Stock Out Probability?**

- To lower the stock-out probability, consider adjusting inventory levels, improving the supply chain's efficiency, or better forecasting demand to balance supply and demand.

**3. Why is the Stock Out Probability important?**

- Understanding this probability helps businesses maintain adequate cash flow, reduce customer dissatisfaction due to unavailable items, and prevent revenue loss from unmet demand.