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Retail Supply Chain lesson

Service level

The business promises a 95% service level: at least 95% of ordered units shipped. Each market against it.

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About 5–10 minutes · no sign-up needed

The idea

The business promises a 95% service level: at least 95% of ordered units shipped. Each market against it:

Formulas

Shipped ÷ Ordered − 95%

Key points

Service levelThe fill rate the business promises its customers, often 95% or more.
Work it outTake the target away from the fill rate. Below zero means the promise was missed.
Why not 100%?Holding enough stock for every possible order costs a lot. 95% balances service against stock.

Service level is the promise. Fill rate is what happened. Report the gap between them.

Practice

Try each one in your head first, then open the answer.

1. Tap a market below the 95% service level.
Canada (75%) and Australia (92%).
2. What is Canada's gap to the 95% service level (fill rate − 95%)?
75% − 95% = −20 points
3. In E6, work out Australia's gap to the 95% target: fill rate − 0.95.
=D6-0.95
4. Why don't most businesses aim for a 100% service level?
It means holding a lot of extra stock, which ties up cash

Learn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.

Try this lesson free →
About 5–10 minutes · no sign-up needed