Relationships between Service Level Measures for Inventory Systems

The service level provided by an inventory system can be measured in various ways. If different measures are used at a number of stock-holding depots, difficulties may arise in comparing performance or assessing the impact of depot centralization or decentralization. If the same measures are used at all depots but the inventory system changes from being based on one measure to another, similar problems arise. In this paper, relationships between six of the most frequently used service measures are presented, enabling each to be converted to a common measure. Data requirements for using the relationships are considered and, where appropriate, alternative relationships are presented which depend on data which may be more readily available in practice.