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1. Types of service level
For inventory models we often refer to two types of service level:
Type I - The service level is defined as the probability of stocking out when there is an order event in the lead time. (Equivalently we can define it as the probability of not stocking out when there is an order event in the lead time).
Type II - The service level is defined as the percentage of demand that is not met from inventory, or equivalently, the percentage of demand that is met from inventory (also known as the Fill Rate).
Example
The example in the following table illustrates the interpretation of the service level:
Period 1 2 3 4 5 6 7 8 9 10
Expected demand 100 100 100 100 100 100 100 100 100 100
Units Short quantity 0 0 0 0 0 1 0 0 0 19
Units Short event - - - - - X - - - X
● Total of Unit Short events: 2 -> Type I service =1 – (2 / 10) = 80%
● Total of Unit Short quantities: 20 -> Type II service level =1 – (20 / 1000) = 98%
2. Why we should select the Type II as the service level
A Type I service objective is appropriate when a shortage occurrence has the same consequence independent of its time or amount. One example would be where a production line is stopped whether 1 unit or 100 units are short. The presupposition of this service, i.e., the same consequence ignoring the time or amount of a shortage occurrence, is not satisfied for most business scenarios. Also, as different items have different cycle lengths, this measure will not be consistent among different products, making the proper choice of this type difficult.
The term Fill Rate is often used to describe Type II service level, and is generally what most managers mean by service level. And the type is applied in most supply chain planning and inventory management products.
3. How to calculate the Safety Factor based on Type II Service Level (i.e., Fill Rate)
Using the above formula, you can get the L(z) via the Fill rate, and then get the Safety Factor z from the normal distribution table based on the calculated L(z).
[ 本帖最后由 icetea_cn 于 2008-8-20 14:57 编辑 ] |
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