What is the cost of not having a product on the shelf when a patient needs it?

• A. Acquisition Costs
• B. Carrying Costs
• C. Procurement Costs
• D. Stock Out Costs

Answer: (D)

Not having a product on the shelf when a patient needs it creates stock-out costs. These are the costs that arise specifically because a shortage prevents immediate fulfillment: lost or delayed revenue from the patient not obtaining the item right away, and additional expenses to recover the shortage—such as expedited orders, rush shipping, and overtime for staff. There can also be clinical and service repercussions, like delays in therapy, the need to substitute with a less ideal option, and patient dissatisfaction or loss of trust. In contrast, acquisition costs refer to the price paid to obtain the item, carrying costs are the ongoing costs to hold inventory, and procurement costs are the administrative costs of placing orders. They describe different aspects of inventory management, not the immediate impact of a stockout.