Glossary · Planning
What is Service level?
Service level is the target probability of not running out of stock during a replenishment cycle, such as 95%.
It sets the z-score used in the safety stock formula. Moving from 95% to 99% raises the buffer by roughly 40%, so high service levels are best kept for products where a stockout is expensive.
Service level is a planning target, not a measurement. The measured counterpart is in-stock rate or fill rate.
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