How is the fill rate ratio calculated?

The fill rate ratio is calculated by taking the number of line items supplied to the customer and dividing it by the total number of line items requested. This metric is essential for understanding inventory performance and customer satisfaction, as it reflects how effectively a business can meet customer demand with its available inventory.

A fill rate above 100% indicates that more items were delivered than were requested—often due to safety stock or strategic over-fulfillment—while a fill rate below 100% signifies that some requested items were not available for delivery. This metric is crucial for businesses as it directly affects customer trust and can influence repeat purchases.

Calculating the fill rate in this manner (line items fulfilled divided by total line items requested) provides a clear picture of how well a business is performing in relation to its service level commitments. This helps businesses identify gaps in their inventory management processes and supports better decision-making regarding stock levels and order fulfillment strategies.