Finding the right balance between holding too much inventory or not holding enough inventory should be a primary goal.
Holding too much inventory consumes cash and space and may lead to shrinkage and obsolescence, while holding too little leads to stock?outs, production delays, expedited shipping and, most importantly, unhappy customers. A company’s service level policy establishes the balance between stock?outs and holding additional inventory. This video reviews how to measure service level and how to determine if you are at the correct service level.
Runtime: 5 minutes
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