What is the difference between service level and fill rate?

Cycle service level measures the probability of avoiding a stockout during a replenishment cycle, and it drives safety stock sizing. Fill rate measures the volume of demand actually fulfilled, in units, lines or orders. A planner can hit a 95% cycle service level while losing 8% of demand in volume, because cycle service level does not penalise the size of the shortage. Use cycle service level for safety stock work and SKU risk profiling, and use fill rate for customer-facing commitments and scorecards.