Threshold service level is customer service associated with the least-total-cost-system
• Existing policies of availability and capability are often assumed as the threshold service level
– Current performance provides starting point for potential service improvements
• Result of a customer service availability analysis is shown in Figure 12.7 for warehouses X, Y and Z
– Based on distribution of an average order
– Delivery time is estimated on the basis of distance
– Transit inventory estimated based on delivery time
• Management can make basic customer delivery commitments of the basic service platform