How to recover from a stockout

Clean up the sales data first

A stockout leaves a hole in your sales history. If a SKU sold zero units for 10 days because it was unavailable, that is not 10 days of zero demand, it is 10 days of missing data. If you feed that straight into a forecast, you will under-order next time. Note the stockout dates for each affected SKU so you or your tools can treat that period differently from a genuine slowdown.

Estimate the demand you actually lost

Look at the daily sales rate in the weeks right before the stockout and use that as your baseline for the missing days, rather than averaging in the zero-sales period. This gives you a more honest daily sales figure to restart your reorder math with.

Reorder based on the real rate, not the gap

Once new stock is confirmed, calculate your order quantity from the pre-stockout daily rate, your lead time, and your target days of cover, minus what you already have on hand or on order. Round up to your supplier's case pack and minimum order quantity.

Find and fix the trigger

Check why the order went out too late: was the lead time wrong, was the safety stock too thin, or did a sales spike happen that your reorder point did not account for. Adjust the lead time or safety days for that SKU and supplier so the same gap does not happen again.

Step by step

1. Record the exact start and end date of the stockout for each affected SKU.
2. Pull the daily sales rate from the 2-4 weeks before the stockout started.
3. Use that pre-stockout rate, not a blended average, as the baseline for future forecasting until you have enough post-restock data.
4. Calculate the restock order: daily sales x (lead time + days of cover) minus stock on hand and on order.
5. Round the order up to the supplier's case pack and minimum order quantity.
6. Review the lead time and safety days you had set for that SKU and increase them if they were too tight.
7. Check if a sales spike or promotion caused the shortfall and flag that supplier or SKU for a higher safety stock going forward.

Worked example

Say a store sold 8 units a day of a candle before going out of stock, then sat at zero for 12 days while waiting on a supplier. Using the 12 days of zero sales in an average would wrongly suggest demand dropped to near zero. Instead, the store keeps using 8 units a day as the baseline. With a 14-day lead time and a 10-day cover target, and 20 units on order, the next purchase order is 8 x (14 + 10) minus 20, which is 172 units.

How SteadyShelf helps

SteadyShelf's 28-day sales window can be skewed by a stockout period, so when you log a stock receipt after an outage, check the suggested reorder quantity against your pre-stockout sales rate before approving the purchase order. It will not automatically exclude stockout days from the forecast for you, so that adjustment is a manual check on your part.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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Related guides

• How to reduce inventory without losing sales
• How to reorder when cash is tight
• How to report on inventory to a business partner
• How to reconcile a supplier invoice with a purchase order

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