How do you calculate service level in Supply Chain?

Cycle service level is calibrated through the safety stock formula: safety stock = Z × σD × √LT, where Z is the service factor (1.65 for 95%, 2.05 for 98%), σD is the standard deviation of daily demand and LT is the lead time. Fill rate is calculated retrospectively as units shipped on time divided by units ordered. The formula gives you a target, but whether the business actually hits it depends on demand normality and lead time stability, and neither assumption holds cleanly across a full catalogue.