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Service Level

The target probability of meeting demand without a stockout.

Area
Inventory
Also known as
cycle service level
In this area
44 terms of 257

Service level is the deliberate choice of how often you are willing to run out. A 95% service level means accepting a stockout in roughly one replenishment cycle in twenty.

It is the input that sets safety stock: each step up in service level costs disproportionately more inventory, so the last few percentage points are the expensive ones.

How it is calculated

Safety stock = Z(service level) × σ_LT

Z is 1.65 at 95% and 2.33 at 99% — the cost of certainty rises steeply.

Service Level is not just a definition here

Inventory runs on this vocabulary every day in AWRA OpsHub — 44 of our 257 glossary terms describe things the platform actually does.