Question

Jon Doe, owner of a local donut shop, recorded it's production quantities, demands, and actual sales of the past 5 days. Assume that any leftover odnuts by the end of the day is discarded and that any excess demand that cannot be satisfied immediately is lost.

Day	Production Quantity	Demand	Actual Sales
1	90	120	90
2	75	100	75
3	100	90	90
4	100	80	80
5	80	160	80

i) Calculate the Type-I customer service level (Cycle Service Level) for the last 5 days.

ii) Calculate the Type-II customer service level (Fill rate) for the last 5 days

Answer 1

At Type I customer service level ( Cycle service level ) , one needs to determine proportion of time a customer’s demand is met. As per data provided in last 5 days , it was only on day 3 and day 4 the full demand was met. On other 3 days ( i.e. on day 1 , day 2 and day 5 ) only part of the demand were catered by low level of sales.

Therefore customer service level is 2 out of 5 cases = 2/ 5 = 0.40 ( or 40 %)

At Type II customer service level ( fill Rate ) , one calculates proportion of total demand quantity which have been mate.

Total demand in last 5 days = 120 + 100 + 90 + 80 + 160 =   550

Total sales in last 5 days = 90 + 75 + 90 + 80 + 80 = 415

Therefore fill rate = Total sales/ Total demand x 100 = 415/550 x 100 =   0.7545 ( 75,45%)

TYPE I CUSTOMER SERVICE LEVEL = 40%

TYPE II CUSTOMER SERVICE LEVEL = 75.45%