Hey, do you know what the difference between holding cost and stockout cost is$?$ I thought they were both used to determine the cost of holding inventory to avoid a stock$-$out.

You're actually right! There's no difference.

Yeah, holding cost is the cost of capital needed to hold inventory on site, while stockout cost is the cost of not having an item available.

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Yeah, holding cost is the cost of keeping inventory to avoid a stockout, while stockout cost is the cost of placing, receiving, and processing an order.