Question

In the event of a "stockout" one of the things that could happen is __________________________________. a. the vendor's plant shuts down. b. the cost of capital is increased. c. the SCOR process would come into play. d. extra shipping cost may be incurred.

Answer 1

Answer:

d. extra shipping cost may be incurred.

Explanation:

Stockout means that a production company has no inventories to produce goods, which is a bad thing that can happen to a company. It means that production has stopped and customers cannot be supplied with order they have made.

There are several effects of stock out on a business, one of which is extra shipping cost may be incurred. A customer that is not ready to wait for his or her order to be met may have the item backorder expecially If the order was part of a larger delivery, then there would be backorder which will require special transportation.

Customers may also cancel his or her order and such customer is lost forever. This customer may also inform other customers thereby spreading bad news about the company which may reduce further sales of the company in the future.

When a company losses a customer as a result of stock out, or is no longer placing an order, a cost(cost of finding a customer a customer to replace the order which would have been purchased) is associated with that which will be borne by the vendor or the company.