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Nov 09, 2022 at 11:34 AM

IBP IO - Non stockout probability and Average service level calculations

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Hi All, Please find below my supply chain network for the task:

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In the current scenario – we have 3 customers to which we are supplying the ORING spare part as per demand forecast for the product. The 2 DCs are procuring the ORING from the central warehouse which in turn is getting the supply from an external supplier.

The following inventory related parameters were maintained

1. Location sourcing ratios = 1

2. Target service level = 95% for all customer facing locations. No Internal service levels are maintained

3. Lot size parameters= none

4. Production parameters = none since we don’t have production happening in this scenario

5. Service level type= F (fill rate)

6. PBR= 1 week for all location product combinations

7. All locations are stocking node except the vendor

Lead time and lead time variability = 1week and 0.1

Upon running the IO operators we get the following results:

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I have the following questions wrt. to the outputs:

Q.1 In screenshot 3, how does the average service level get calculated as 0.963721 when I have maintained the target service level as 0.95 and no Internal service level. Isn’t Average service level the average of target and internal service level?

Q.2 How do we arrive at the given values for non-stockout probability and verify the same?

Thanks

Sachin

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