1. What is Inventory Days Supply?

Inventory Days Supply is a key inventory management metric that calculates how many days your current inventory will last based on average daily demand. It helps businesses optimize stock levels and prevent stockouts.

2. How Does the Calculator Work?

The calculator uses the Days Supply formula:

Where:

• \( Inventory \) — Current stock level in units
• \( Daily\ Demand \) — Average daily consumption in units per day

Explanation: This simple division gives you the number of days your current inventory will last at the current consumption rate.

3. Importance of Days Supply Calculation

Details: Calculating days supply is crucial for inventory planning, preventing stockouts, optimizing reorder points, managing cash flow, and ensuring smooth operations.

4. Using the Calculator

Tips: Enter current inventory in units and average daily demand in units per day. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good days supply target?
A: This varies by industry and product, but typically 30-60 days is common for most businesses. Perishable items require shorter cycles.

Q2: How do I calculate daily demand?
A: Divide total demand over a period by the number of days in that period. For example, monthly demand ÷ 30 days.

Q3: Should I use current or average inventory?
A: Use current on-hand inventory for most accurate results, but average inventory can be used for planning purposes.

Q4: What if demand is seasonal?
A: For seasonal products, use seasonally adjusted demand figures or calculate separate days supply for peak and off-peak periods.

Q5: How does this relate to reorder point?
A: Days supply helps determine when to reorder. When days supply drops to your lead time plus safety stock days, it's time to reorder.