The performance of two popular service measures on management effectiveness in inventory control

Service is one of the inventory managers' concerns and is frequently incorporated into the ordering decisions. Since there are multiple measures of service available for evaluating the efficiency of an inventory system, a comparative study is necessary and has not been addressed in the literature. This paper evaluates two popular service measures, which are the probability of no stockout during lead time and the fill rate, in the context of continuous inventory systems. The performance of the two measures is examined by evaluating the tradeoff among the cost, the level of service, and the inventory turnover ratio. (C) 1999 Elsevier Science B.V. All rights reserved.