Fill Rate
Service level based on backorders.
These tools are provided for educational and operational guidance only. Results are estimates and may not reflect all factors in your business. Always review calculations and use your own professional judgement before making decisions.
What is this tool?
The Fill Rate calculator measures what proportion of demand you actually ship from available stock, rather than backordering. It is a practical way to quantify service level from the customer's point of view.
Formula
The tool uses a simple cycle-based formula:
Fill rate = 1 − (backorders ÷ cycle demand)
- Cycle demand = total units requested in the period.
- Backorders = units you could not ship immediately and had to delay.
The result is expressed as a percentage. Higher fill rates mean better service to customers, but often require more inventory.
Example
Suppose in a month you received 1,000 units of demand and had 50 units backordered.
Fill rate = 1 − 50 ÷ 1,000 = 95%.
This means that 95% of demand was shipped immediately from stock, while 5% had to wait. You can compare this against target service levels or previous months.
When should you use this tool?
- When tracking service level performance for key product lines or customers.
- When reviewing whether safety stock and reorder policies are sufficient.
- When comparing performance between warehouses, stores, or suppliers.
- When reporting to management on customer service quality and stockouts.
How this tool helps your business
- Turns abstract “service level” discussions into a measurable percentage.
- Helps you balance inventory investment against promised service to customers.
- Highlights issues in specific SKUs, locations, or time periods.
- Supports continuous improvement in inventory planning and execution.
Related tools
- Safety Stock Calculator – design buffers that help you achieve higher fill rates.
- Reorder Point Calculator – ensure you are ordering at the right time to maintain service.
- ABC Classification – focus high fill-rate targets on your most important SKUs.
- Inventory Turnover Calculator – balance service with healthy inventory rotation.
Frequently Asked Questions
Is fill rate the same as on-time delivery?
Not exactly. Fill rate looks at how much demand you can ship immediately from stock. On-time delivery also considers promised dates and transport performance.
What is a good fill rate target?
Many businesses target 95–98% for A items and lower for less critical SKUs. The right target depends on your industry, margins, and customer expectations.
Should I calculate fill rate by item or overall?
Both views are useful. Overall fill rate shows customer experience; item-level fill rate helps you pinpoint problem SKUs and categories.
How often should I track fill rate?
Many teams monitor it weekly or monthly, and near real time for key accounts or channels. Choose a cadence that matches your planning and review cycles.