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Title: Explain the relationship between product availability and supply chain profitability. What will ... Post by: EnS0urce on Jan 30, 2018 Explain the relationship between product availability and supply chain profitability.
What will be an ideal response? Title: Explain the relationship between product availability and supply chain profitability. What will ... Post by: cvalliere on Jan 30, 2018 Answer: The level of product availability is measured using the cycle service level or the fill rate, which are metrics for the amount of customer demand satisfied from available inventory. The level of product availability is also referred to as the customer service level. The level of product availability is an important component of any supply chain's responsiveness. A supply chain can use a high level of product availability to improve its responsiveness and attract customers. This increases revenues for the supply chain by increasing sales through high product availability when customers come to make a purchase. However, a high level of product availability requires large inventories, and large inventories tend to raise costs for the supply chain. Therefore, a supply chain needs to achieve a balance between the level of availability and the cost of inventory. This optimal level of product availability is one that maximizes supply chain profitability. Whether the optimal level of availability is high or low depends on where a particular company believes they can maximize profits.
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