Fill rates for a location are computed by weighting each item’s achieved/target fill rate by it’s future forecast value. Target fill rate is a system input denoting the desired level of stock availability.

When your customers come to purchase from you, you can only supply them with inventory 86.7% of the time. You’re targeting 96.9%.

Your goal: to bring the Achieved value as close to the Target value as possible while maintaining or reducing the stock holding value.

The reason your Fill Rate is low is because of the items that are out of stock right now. The lost sales value, at cost, is accumulated until either the next order arrives or an order placed today can be received (whichever comes first) .

Your goal: to get these items in stock as soon as possible, minimising the stock-out period.

Not only is your Fill Rate low because you’re out of stock of items but it’s getting worse. These items are predicted to run out of stock before either the next order arrives or an order placed today can be received.

Your goal: to bring orders forward or to place emergency orders now to get these items back in shape as soon as possible.

Fill rate: On any given day, an individual item is either in stock or out of stock – you are considered to be out of stock if your nett available stock (i.e. physical on hand stock less backorders) is zero or negative. If an item was out of stock for 3 days in a 30 day period, the fill rate on that item would be 90%.

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