Missed Sales/Out-of-Stock Calculator

When you reduce it to its simplest terms, inventory management encompasses 3 things:

1. That you offer the products customers want to buy from you and expect you to sell.
2. That products are stocked in an organized manner on your salesfloor so customers (and employees) can find what they are looking for.
3. That you have processes in place so you remain in stock when customers want or need a particular product.

While overly simplistic, these three basic “assumptions” of inventory management can have dramatic implications for independent home improvement retailers if not followed. For example, many customers will abandon a purchase altogether if you don’t have the key item (project starter) they need when they need it. And how many other times have you missed out on the sale of one or two items from the overall transaction because you were out of stock on an item? Both cases can lead to customer dissatisfaction and send them scurrying to the competition. Both cases can also have an enormous impact on the sales and profitability of your store, as is illustrated in this exercise.