Fill Rate

Three variants circulate under the same label and they answer different questions. Unit fill rate measures quantities, line fill rate measures order lines, order fill rate measures whole orders – and the stricter the unit of measurement, the lower the number. An order of ten lines and 300 units that ships short by three units reaches 99 % unit fill rate, 90 % line fill rate and 0 % order fill rate at the same time. A supplier reporting 99 % and a customer measuring 90 % can therefore both be right, which is why the definition belongs in the contract rather than in the report.

• Unit fill rate = units delivered ÷ units demanded × 100.
• Line fill rate = order lines delivered in full ÷ total order lines × 100.
• Order fill rate = orders delivered in full ÷ total orders × 100.

The larger distortion sits in the denominator. Demand that never became an order – a customer who found the shelf empty and bought a substitute or nothing at all – leaves no record, so a fill rate calculated from sales data flatters itself precisely on the items that failed most often. The same holds when the denominator is the confirmed quantity instead of the originally requested one: the shortfall is negotiated away before it is measured. A usable fill rate is computed against reconstructed baseline demand and split by cause – forecast error, replenishment timing, supplier shortfall, or stock records that do not match the shelf.

Fill rate in practice

Fill rate is a diagnostic rather than a target in itself: it quantifies how much demand was lost, while the target that drives inventory is the service level from which safety stock is derived. Veritico STOCK cleans stockouts out of the sales history before it forecasts, so the baseline is fitted to demand rather than to censored sales, and its stockout report shows the service level actually delivered instead of the one implied by sales. See demand forecasting and inventory optimization, replenishment and allocation management, and the Albert case study on availability in food retail.

Related terms

• Service level
• Stockout
• Safety stock
• Inventory optimization
• Inventory turnover
• Reorder point