Stock-out costs, Managerial Accounting

Assignment Help:

Stock-out costs

These are the opportunity costs of running out of stock. They comprise:

1) The costs of lost customer sales, and therefore lost contribution to fixed costs.

2) Potential loss of goodwill with customers whose demand cannot be net.

3 Acquiring emergency supplies at higher prices to meet demand.

4) Cost production of finished goods, where raw material stock-outs occur.

The computation of safety stocks lingers on demand forecasts. The manager will have some notion (usually based on past experience) of the range of daily demand. That is the probability that exists for usage of various quantities.


Related Discussions:- Stock-out costs

Classification of costs, identify and explain the many classification of co...

identify and explain the many classification of costs for planning, control,performance evaluation and decision making.

The incredible game theorist, The Incredible game theorist Mr. Nash's w...

The Incredible game theorist Mr. Nash's work needed refining. First, it applies to games played only once, or in which players move simultaneously. But virtually all interestin

Assignment help, I need help making sure I did my accounting assignment cor...

I need help making sure I did my accounting assignment correctly

Advantages of value added statements, Advantages of Value Added Statements ...

Advantages of Value Added Statements 1) Managers might be in a better position to control their organizations own inputs than the cost and usage efficiency of purchased materia

What is period cost, What is period cost Period costs are those costs w...

What is period cost Period costs are those costs which are reported as expanses of the period in question. These are cost which are not assigned to the product but are charged

Open account, Open Account Credit sales are usually on open account tha...

Open Account Credit sales are usually on open account that implies which the seller ships the goods to the buyer and afterward sends the bill invoice. Consignment In th

What are the categories of zero base budgeting, Categories of zero base bud...

Categories of zero base budgeting The preceding discussion will reveal that zero base budgeting is based primarily on: 1) Development of decision units 2) Identification

PRATICAL PROBLEM, The standard cost of chemical mixture ~ PQ’ is as follows...

The standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticipated in

Objective function, Objective Function Although the standard LP model c...

Objective Function Although the standard LP model can be either the maximization or the minimization type, it is sometimes useful to convert one form to the other. The maximiz

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd