What is the purpose of out-of-stock management?

The purpose of out-of-stock management is to minimize lost sales due to product unavailability. When a product is out of stock, potential sales are lost because customers cannot purchase the items they need or want. Effective out-of-stock management strategies ensure that inventory levels are monitored, and replenishment occurs timely to meet customer demand. This not only helps maintain sales revenue but also enhances customer satisfaction, as customers are more likely to return to a retailer that consistently has the products they seek available.

In contrast, while reducing inventory costs, improving customer service quality, and streamlining supply chain processes are important objectives for retailers, they do not directly address the immediate issue of sales loss caused by products being out of stock. The primary goal of managing out-of-stock situations is directly linked to maintaining availability for customers and preventing lost sales opportunities.