Stock shortage costs are not a financial cost but and can not be directly explained in terms of money but it is these cost related to reputation and smooth operations of the entity.
Production Stoppage
The stock shortage will result in stoppage of production process which is not a healthy thing for an organization. The stoppage off course is the wastage of many resources.
Order completion
The shortage may result in delay the order completion which will bring a bad reputation to the organization.
Loss of Revenue
The stock shortage will impact the production process and the entity would not be able to meet the demands of customers and this will result in loss of revenue.
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