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Question 241 - CSCP discussion

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Which of the following measures best describes fill rate?

A.
Ratio of available inventory to cost of goods sold (COGS)
Answers
A.
Ratio of available inventory to cost of goods sold (COGS)
B.
Ratio of cost of goods sold to available inventory
Answers
B.
Ratio of cost of goods sold to available inventory
C.
Percentage of demand satisfied by available inventory
Answers
C.
Percentage of demand satisfied by available inventory
D.
Percentage of closed orders to total orders
Answers
D.
Percentage of closed orders to total orders
Suggested answer: C

Explanation:

Fill rate, in the context of supply chain management, is best described as the percentage of demand that is satisfied by available inventory. This measure is crucial for evaluating the efficiency and effectiveness of the inventory management system.

Service Level Indicator: Fill rate directly reflects the ability to meet customer demand without delay, indicating the service level performance.

Inventory Effectiveness: A high fill rate suggests that the inventory levels are well-aligned with demand patterns, minimizing stockouts and backorders.

Customer Satisfaction: Meeting demand promptly leads to higher customer satisfaction and loyalty.

Operational Efficiency: A good fill rate balance helps in optimizing inventory carrying costs while ensuring demand fulfillment.

Benchmarking: Fill rate is commonly used as a benchmark to compare performance over time or against industry standards.

Ballou, R. H. (2004). Business Logistics/Supply Chain Management. Pearson.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management. McGraw-Hill.

asked 16/09/2024
Moraes, Jefferson
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