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Are those people optimizing for having every product available at every time? They have to balance against the very real cost of spoilage, so I don’t think they consider the occasional out–of–stock as the system breaking


Yes they are. Product availability is the most important factor in choosing a grocery store, as unavailability makes people need to visit additional stores or change recipes/plans on the fly. Some spoilage is factored in and is just a minor bit of negative PR. However, the supply chain disruptions since 2020 are too big for any grocery chain to "solve".

https://hbr.org/2004/05/stock-outs-cause-walkouts


The answer is actually "It depends"

For some products like pasta and canned tomatoes, you can hold enough stock to deal with a 99th-percentile day without any wastage at all; if it doesn't sell today, it'll sell tomorrow.

But for those little packaged sushi snacks with a one-day shelf life? Any overstock is going in the trash at the end of the day.

And sushi snacks mostly sell to workers on their lunch breaks. You'll see big fluctuations in demand if a nearby office changes their work-from-home policy, or has a big all-hands meeting that gets everyone in. Even the greatest demand modelling can't predict such things, as nearby office meetings aren't available as a model input.

Some products are also easily more easily substitutable than others: If the 1kg pack of mid-priced spaghetti is out of stock, maybe I buy the low-priced brand, the premium brand, the 500g packet, the wholewheat version and so on.


>Product availability is the most important factor in choosing a grocery store

For many people, price is almost certainly at least as big a factor. Many, perhaps even most, people are willing to accept things being out of stock now and then for 10% lower prices.


Spoilage is more an issue of waste than accidentally selling a spoiled product.




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