Practical Methods For Accurate Fill Rates

Abstract

A frequently used method of specifying customer service is fill rate, the fraction of demand to be served directly from stock. An exact formula relating the fill rate to the reorder point presents certain computational difficulties. This formula is reviewed in detail and practical methods for its implementation with the normal and Poisson distributions are presented. In the normal case a rational expression is developed for the formula, while in the case of a Poisson distribution an algorithm is provided.

Résumé

Une méthode utilisée souvent pour definir le service clientèlle est le taux de remplir, la fraction de la demande servie directement de stocke. Une formule exacte liant le taux de remplir au point de relance de commande présente certaines difficultés de calcul. Cette formule est revisée en detail et des méthodes practiques pour sa mise en oeuvre avec les distributions normale et Poisson sont présentées. Dans le cas de la distribution normale une expression rationelle est développée pour la formule, tandis qu’avec la distribution Poisson une algorithme est fournie.

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Notes on contributors

Paul Vincent

PAUL VINCENT is currently a senior Defence Sciefitist with the Operational Research and Analysis Establishment (ORAE) of National Defence. He received a BSC (1966) and MSC (1967) from the University of Ottawa and a PHD (1973) from the University of Rochester. After a few years of teaching at the University de Moncton and project management with Supply Services Canada, he joined ORAE, where his current interests are in the area of inventory control.