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Stock out cost means the cost associated with not serving the customers. Stock outs imply shortages. If the stock out is internal ( that is in the production system) it would imply that some production is lost resulting in idle time for men and machines or that the work is delayed which might attract some penalty. While if the stock out is external it would result in a loss of potential sales and / or loss of customer goodwill. A shortage can evoke different reactions from customers it would result in a backorder or a lost sale. In case of backorder the sales are not lost they are only delayed.
Ian Davis took over the position of MD at McKinsey & Company in 2003. He has numerous opinions from in-house colleagues about future directions of the firm. But as the textbook (Tr
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Approaches to short-term financing problem?
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