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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

Fill Rate

Fill rate is a measure of the portion of the customer’s demand that we will have stock on hand to supply (i.e. fill). Inventory availability performance is typically expressed as the demand fill rate.  Fill rate can be expressed as the line, order, and/or unit fill rate.  In each case the fill rate measures the ratio of satisfied to total demand.  The line fill rate (LFR) is the ratio of the number of order lines completely satisfied (LS) to the total order lines requested (LR).

  • LFR = LS / LR

The order fill rate (OFR) is the ratio of the number of orders completely satisfied without substitution or backorder (OS) to the number of orders requested (OR).

  • OFR = OS / OR

The unit fill rate (UFR) is the ratio of the total units shipped (TUS) to the total units requested (TUR).

  • UFR = TUS / TUR

In each case, the fill rate can be measured as the first-time-fill-rate (FTFR) which assesses the fill rate upon initial demand, or the secondary fill rate (SFR) achieved via substitutions and backorders.

Unless stated otherwise, all references to fill rate here will be to first-time-fill-rate.

If you only know one of the fill rate measures, the other two can be estimated as follows.  The line fill rate can be estimated by raising the unit fill rate to the average units per line (upl) power.  The order fill rate can be estimated by raising the line fill rate to the average lines per order (lpo) power.

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