Lost sales refer to the revenue lost when customer demand cannot be fulfilled due to stockouts. It directly impacts profitability and customer satisfaction. Identifying the causes of lost sales—be it forecasting errors, supplier delays, or poor replenishment policies—is key to improving inventory performance. Not all lost sales are visible, especially in online environments where customers may abandon carts. Inventory optimization platforms use machine learning to estimate potential lost sales by analyzing web traffic, stockout events, and alternative product conversions. This data informs better stock allocation and service level planning.
