1 : Financial Impact - Stockouts ( Read this information carefully! ) Below are supply chain members for two brands of soap: " RedSoap " and " BlueSoap " Assume that customers will always choose " RedSoap " first when purchasing soap and that the profit on this brand is the higher of the two. Using the information below, calculate the total stockout cost for each member of the supply chain and compare the costs of each. Retailer ( carries both RedSoap and BlueSoap brands ) : 2 5 % of customers will accept a backorder of RedSoap 3 0 % will buy BlueSoap if RedSoap is out of stock ( same store ) 2 0 % will go to a different store ( lost sale ) 2 5 % will discontinue doing business with the retailer Each RedSoap backorder costs $ 5 9 Each BlueSoap purchase costs $ 7 0 ( lost profit ) Each RedSoap lost sale costs $ 1 4 5 Each RedSoap lost customer costs $ 1 , 6 0 0