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Costs of Understocking
Expenses incurred due to insufficient inventory levels, leading to lost sales, backorders, and potentially damaged customer relationships.
Cycle Service Level
A performance metric that measures the probability of meeting customer demand without stockouts within a given inventory cycle.
Profitability
A measure of the efficiency and effectiveness of a company's operations, indicated by its ability to generate income relative to revenue, assets, equity, or other financial metrics.
Demand Uncertainty
Refers to the unpredictability of customer demand for a product or service, making it difficult for companies to accurately predict sales volumes.
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