Fill Awardee Calculated with airSlate SignNow

Fill recipient calculated

many of our customers often ask what's the difference between service level and fill rate they're both very useful measurements of how effectively you're meeting your customer demand but they actually mean very very different things and it's important to understand those differences so that you can get the right outcome and your planning process so I wanted to prepare a very quick and simple example that that clearly shows those differences so to start we're going to enter some observations these could be you know a period of 10 days it could be 10 customer orders it could be 10 months or 10 weeks here we're going to enter the inventory level that was available for sale at that particular time let us assume that it's 35 units at the start of each of those observations and here we're going to enter a theoretical demand some demand so let's measure service level first service level asks the quote simply answers the question did I stock out or not and how often did I not stock out so to do that you can enter a very simple equals if statement if inventory is greater than or equal to my demand then we didn't run out and we get a point and when we do run out we don't get a point so very simply inventory in this case gets us a 70 percent service level 7/10 10 total observations is 70 percent so we get a 7 percent 70 percent service level but what is our fill rate so we know we're 70 percent likely not to run out we'll fill the demand we can reach back on the shelf for the 70 percent probability and fill whatever the customer wants but 30 percent of the time you do run out and fill right answers the question what is the total number of units that you will actually fill based on the total that is in fact order what will you fill versus what is order and so here we we simply say look if there was a stock out then if there was a stock out we just need to count how big that was and we can do that by just saying equals if the service level is 100 percent meaning we didn't run out then the stock out was 0 and if we did run out we want to take the demand and subtract the available inventory from that and so now we see what the stock out quantity was you can then add that stock of quantity up and we see we stopped out of a total of 19 units now we know the total demand was let's add it up here 240 units so therefore our fill rate is going to be 240 minus 19 because that's what we filled divided by 240 because that was the demand and you get a fill rate of 92% and so you can see very very different answers...