A stockout refers to?

A stockout occurs when a business cannot meet customer demand for a product due to a lack of inventory. This situation arises when the stocks of a product are depleted, leading to the inability to fulfill orders or provide the product to customers when they desire it. Stockouts can result in lost sales, decreased customer satisfaction, and potential long-term damage to a brand's reputation, as customers may turn to competitors to satisfy their needs. Understanding stockouts is critical for effective inventory management and operations, as companies strive to balance between supply and demand to maintain sufficient inventory levels.