Inventory Reliability

Abstract

As stated in the overview, the primary function of inventory is to serve the customer. In the determination of the service level, the customer is the direct recipient of the product. The purchaser of a screw driver set is the customer of the retailer, such as a hardware or discount house. The retailer is responsible for maintaining a stock level that will allow an acceptable service level for the customer. In off-the-shelf commodities, such as the screw driver set, a high service level is required because, if the screw driver set is not in stock, the customer has the option of going to a competitor for the purchase and he will probably do so. If the purchaser requires a specific brand of specialized screw drivers that are not stocked by all retailers, the service level requirement may not be as high, since the customer may be willing (or have) to come back when the item is in stock.