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Stockout is a situation in which a company sells its entire inventory. A stockout may occur, for example, when there is a delay in a scheduled delivery of new inventory, however, it basically means that the demand exceeds the supply. Although it is relatively good to sell out your inventory rather than having a surplus of overstock, this unbalanced flow of business can cause the company to miss opportunities of maximizing their profits.

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Q: What is the effect of stockout on an organization?
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