# Branch Stockout Cost Calculator for Multi-Branch Distributors

> Source: https://netray.co/tools/eclipse-branch-stockout-lost-sales-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Estimate what stockout days cost at a branch in lost margin and inter-branch transfer expense, and test how improving availability changes the number.

## Category

supply-chain

## Erp

Epicor Eclipse

## Industry

Wholesale Distribution

## Audience

- Branch manager
- Regional manager
- Inventory planner

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Average daily demand for the item

**Key:** daily_units

**Type:** number

**Default:** 14

**Min:** 0

**Step:** 1

**Unit:** units/day

#### Stockout days per year

**Key:** days_out

**Type:** slider

**Default:** 18

**Min:** 0

**Max:** 120

**Step:** 1

**Unit:** days

#### Gross margin per unit

**Key:** unit_margin

**Type:** number

**Default:** 11

**Min:** 0

**Step:** 0.5

**Unit:** $

#### Demand lost permanently while out

**Key:** lost_pct

**Type:** number

**Default:** 35

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

**Help:** Customer buys elsewhere instead of waiting.

#### Demand filled by transfer from another branch

**Key:** xfer_pct

**Type:** number

**Default:** 40

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

#### Transfer cost per unit

**Key:** xfer_cost

**Type:** number

**Default:** 3.5

**Min:** 0

**Step:** 0.25

**Unit:** $

**Help:** Truck, driver time and handling per unit moved.

**Outputs:**

#### Demand during stockouts

**Key:** short_units

**Expr:** daily_units * days_out

**Format:** integer

#### Units lost for good

**Key:** lost_units

**Expr:** short_units * lost_pct / 100

**Format:** integer

#### Units supplied by transfer

**Key:** xfer_units

**Expr:** short_units * xfer_pct / 100

**Format:** integer

#### Margin lost

**Key:** lost_margin

**Expr:** lost_units * unit_margin

**Format:** currency

#### Transfer expense

**Key:** xfer_total

**Expr:** xfer_units * xfer_cost

**Format:** currency

#### Annual stockout cost for this item and branch

**Key:** total_cost

**Expr:** lost_margin + xfer_total

**Format:** currency

**Primary:** true

#### Cost of each stockout day

**Key:** cost_per_day

**Expr:** if(gt(days_out, 0), total_cost / days_out, daily_units * (lost_pct / 100 * unit_margin + xfer_pct / 100 * xfer_cost))

**Format:** currency

**Primary:** true

**Chart:**

#### Annual stockout cost by stockout days

**Type:** line

**X:** days_out

**From:** 0

**To:** 120

**Steps:** 24

**Series:**

- total_cost

**Disclaimer:** The remainder of demand is assumed to wait and be filled by backorder at no extra cost. Adjust the percentages to your reality.

## Content

**Intro:** At a single branch, a stockout looks like a missed sale. Across a branch network it also creates transfers, expedites and customer drift. This calculator prices the stockout days for one item at one branch.

**Sections:**

#### How to use it

**Body:** Choose a fast mover that stocks out occasionally. Enter its average daily demand, the number of stockout days you see per year, and the margin per unit. Estimate three behaviors: how much demand is lost for good, how much is rescued by a transfer from another branch, and what a transfer costs per unit. The remainder is treated as waiting at no extra cost.

**Bullets:**

- Pull stockout days from daily on-hand snapshots or no-stock lines.
- Use real transfer cost: trucking, labor and handling.
- Run the top 20 items by revenue for each branch.

#### The formula

**Body:** Demand during stockouts equals daily units times stockout days. Lost margin equals that demand times the lost share times unit margin. Transfer expense equals demand times the transfer share times transfer cost. The sum is the annual cost. For 14 units a day and 18 stockout days, demand during stockouts is 252 units, so a 35 percent loss rate at 11 dollars margin costs about 970 dollars before transfers.

#### Reading the result

**Body:** The cost per stockout day tells you how much a day of extra safety stock is worth. If adding a few days of cover costs less than the stockout days it prevents, increase the branch stocking level. If transfers are the main cost, consider stocking the item centrally or at a closer branch.

#### Common mistakes

**Body:** Counting all demand as lost overstates the problem because many contractors will wait for a day or two. Another error is leaving out the demand pattern: if a stockout hits on peak days, daily demand understates it. Use demand on the specific days out of stock where you can.

**Cta:** Netray can help identify stockout days and transfer patterns by branch and item from your ERP data, read-only.

**Faq:**

#### How do I count stockout days?

**Answer:** Use a daily on-hand snapshot or movement history and count days with zero available quantity while the item had demand. If you lack snapshots, estimate from no-stock lines on orders.

#### What lost sales percentage is typical?

**Answer:** It varies widely by product and customer. Commodity items often lose more demand than specialized items. Estimate from sales rep feedback or test with a range, since the chart shows sensitivity.

#### Does it apply outside Eclipse?

**Answer:** Yes. The model is generic to any branch-based distributor. The Eclipse label reflects the typical multi-branch use case, not a system integration.

#### What about substitutes?

**Answer:** Treat substitute sales as recovered demand by lowering the lost percentage. The substitute may have a different margin, which you can reflect in the unit margin.

## Search terms

stockout cost calculator, lost sales calculator inventory, branch stockout cost, multi branch distributor inventory, eclipse branch replenishment, cost of being out of stock, inter branch transfer cost

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