While no company can profitably achieve 100% service, the goal is to set service level targets in a way that maximizes profits and yet allows for Marketing and/or Sales to provide input. The last step in configuring a vendor in HIMPACT is to run Service Level Analysis, or SLA. This powerful simulator calculates the carrying cost of the safety stock required for each SKU at each warehouse for every service target between 80-99.9%.
This can lead to significant increases in profitability, especially when you compare this strategy of setting all SKUs to their most profitable target versus that of having all SKUs at the same target.
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