Inventory Service Levels — Comparison of Measures

Abstract

Inventory service levels are a concern of every inventory system. Poor service levels may result in loss of customers and sales, whereas excessive service levels result in loss of money due to large inventories. Although inventory service levels have been discussed widely in the professional literature, the emphasis has been on service levels during replenishment lead times. Overall service levels, which are much more relevant to customers, have received little attention, and the results presented are often mistaken. This article reviews measures of inventory service levels both for single and multiple items, relates single item measures during lead times to their overall counterparts, and shows that overall measures are not only more relevant to customers, but also require lower safety stock from the provider of the goods.

Citation

Ronen, D. (1983), "Inventory Service Levels — Comparison of Measures", International Journal of Operations & Production Management, Vol. 3 No. 2, pp. 37-45. https://doi.org/10.1108/eb054694