Over a four day period, a customer orders from a supplier every day. The customer orders 50 units on days one and three, and doubles their order on days two and four. If the supplier doesn't have inventory availability to service the customer on the fourth day, what is the fill rate?

Question

Business

Kayley Arnold

12 December, 21:30

Over a four day period, a customer orders from a supplier every day. The customer orders 50 units on days one and three, and doubles their order on days two and four. If the supplier doesn't have inventory availability to service the customer on the fourth day, what is the fill rate?

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Answers (1)

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Cohen Watkins · Answer 1

Fill rate = 0.6666667 = 67%

Explanation:

Fill rate is defined as the portion of customer demand that is met by available inventory of a business without backorders or lost sales.

Fill rate is a preferred indicator because it shows clearly the fraction of demand not satisfied by available inventory, and gives a specific amount by which inventory can be improved to meet customer demand.

To calculate fill rate we use the following formula.

Fill rate = number of items sold : number of items requested

Items sold = 50 + 50 + (2*50) = 200

Items requested = 50 + 50 + (2*50) + (2*50)

Items requested = 300

Fill rate = 200 : 300 = 0.6666667 = 67%