The following can be the consequences of under stocking:

-Production process cannot be operated efficiently, resulting delivery schedules.

-Firm may end up paying an idle labour force due to the production hold ups.

-Organisation may loose its important customers, due to the delay in meeting customers’ orders.

-Unfavourable prices and quality Increased administration costs.

-Due to under stocking it will not be easy for the organisation to meet the unexpected demands of customers.