Availability is the capacity to have inventory when desired by a customer. As simple as this may seem, it is not at all uncommon for an organization to expend considerable time, money, and effort to generate customer demand and then fail to have product available to meet customer requirements. The traditional practice in many organizations is to stock inventory in anticipation of customer orders. Typically an inventory stocking plan is based on forecasted demand for products and may include differential stocking policies for specific items as a result of sales popularity, profitability, and importance of an item to the overall product line and the value of the merchandise.
While the detail of establishing inventory stocking policies is covered in chapter 7, it should be clear that achieving high levels of inventory availability requires a great deal of planning. In fact, the key is achieving these high levels of availability while minimizing overall investment in inventory and facilities. Exacting programs of inventory availability are not conceived or managed on average; availability is based on three performance measures: stocking frequency, fill rate, and orders shipped complete.