Delivery readiness level

The degree of readiness for delivery is a measure of the availability of goods. It takes account of the problem that the extent of the demand for goods can often not be reliably determined in advance according to their availability. This makes it necessary to have a Security distance to be able to meet the requirements.

Delivery readiness level = service level?

A safety stock that would meet this 100 % is uneconomical because the average inventory and the storage costs would increase sharply. For this reason, a certain degree of readiness for delivery is determined, which indicates what proportion of requirements the warehouse should be able to carry out. It is also called the degree of service.

The degree of readiness for delivery is determined as a percentage of the requirements that are covered by the stock in the planning period:

A degree of readiness for delivery of 90 % to 95 % is often considered sufficient. A higher level of readiness for delivery should be avoided, as it causes the storage costs in the company to rise disproportionately. In the example it is around 60 %.

The degree of readiness for delivery influences the material stock strategies.

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