What does the term "stockouts" refer to in inventory management?

The term "stockouts" in inventory management specifically refers to a situation when an item is unavailable for sale because there is no stock left. This occurs when the inventory level of a product reaches zero, meaning that customers cannot purchase it until new stock arrives. Stockouts can lead to lost sales, customer dissatisfaction, and can negatively impact a company's reputation and customer loyalty.

In contrast, a surplus of products indicates an overabundance of inventory, which does not align with stockouts. Additionally, unexpected shipment delays may affect inventory levels, but they are not a direct definition of stockouts. Lastly, a process of excess inventory relates to having more stock than necessary, which also does not capture the essence of stockouts. Understanding this concept is crucial in supply chain management to ensure that inventory levels are maintained appropriately to meet customer demand.