The purpose of this perspective paper is to theorize a more comprehensive view of retail stockout costs and explore the potential operationalization of this perspective for improved supply chain decisions and resulting performance.
The retail stockout literature is reviewed to summarize the current types of out-of-stock costs. Theoretical foundations of Service Dominant Logic are suggested as a more holistic, accurate and useful view for stockout cost conceptualization. Market Basket Analysis and Real Options Analysis are identified as tools to help operationalize a revised value-in-use approach to stockout costs.
This research enhances our understanding of stockout costs and corresponding managerial actions with meaningful implications for retail supply chain performance.
This research deviates from traditional inventory theory to provide a unique perspective on stockout costs that is conceptualized within the literature and operationalized with the novel combination of cross-functional analytical tools.
