Question: Calculate the cost of the stockout under the following conditions: A vendor supplies 9,000 retail outlets. The vendor's order fill rate is 98%. Therefore, at

Calculate the cost of the stockout under the following conditions: A vendor supplies 9,000 retail outlets. The vendor's order fill rate is 98%. Therefore, at any given time, 180 stores are out of stock. On average, each store sells 6 units of an item that costs $9 each for $15 each week. Also, the retailer charges 50% of the lost sales dollars back to the supplier. a. What is the annual cost of the stockout in lost profits to the retailer? b. What is the annual cost of the stockout in lost sales dollars to the supplier

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!