Enter the number of expected stock-outs and the number of expected demand requests into the calculator to determine the stock-out probability.

## Stock Out Probability Formula

The following equation is used to calculate the Stock Out Probability.

PS = ES / ED * 100
• Where PS is the probability of a stock out (%)
• ES is the number of expected stock outs
• ED is the number of expected demand requests

To calculate the stock out probability, simply divide the number of stock outs by the number of demand requests, then multiply by 100.

## What is a Stock Out Probability?

Definition:

A stock-out probability is the percentage chance of a product not being in stock when an order is placed. Stocks out probabilities are calculated by examining the length of time it takes to fulfill orders, the frequency of new orders, and the time between restocking orders.

A low stock-out probability indicates that an adequate inventory level is available to satisfy demand. A high stockout probability may indicate a need to increase inventory or reduce sales demand.