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It's been a long time since my college days, so I need some help for something that is likely pretty simple to most of you.

In the book Factory Physics, there is a formula for Service Level stated as follows:

$$Service Level = P\{CycleTime \le LeadTime\}$$

I'm not sure how to read or interpret the formula. Can you help me out in digesting it?

Thanks, in advance.

RDCushing
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2 Answers2

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The "service level" is equal to the probability that the "cycle time" is less than or equal to the "lead time".

Kenny Lau
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They define service level as a number between $0$ and $1$, indeed a probability. The service level equals the probability that your cycle time is less or equal to your lead time.

Somehow an interesting definition: one could imagine an ideal factory, where they deliver $1$ second earlier with probability $0.5$, or $1$ $\mathbf{year}$ later again with probability $0.5$.

Such factory would have the same service level metric of a competitor, delivering $1$ second earlier with probability $0.5$, or $1$ second later again with probability $0.5$.

I would still call the second one...

An aedonist
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  • Both Kenny Lau and An aedonist answered my question, and I thank them both. However, An aedonist added an interesting comment on the logic employed in this calculation, and the comment is (in my opinion) very worthy of consideration. – RDCushing Sep 18 '17 at 11:39