1. What is Days Supply of Inventory?

Days Supply of Inventory is a key inventory management metric that calculates how many days your current inventory will last based on your average sales rate. It helps businesses optimize inventory levels and avoid stockouts or overstocking.

2. How Does the Calculator Work?

The calculator uses the Days Supply formula:

Where:

• \( \text{Inventory} \) — Current inventory level in units
• \( \text{Sales} \) — Annual sales in units per year
• \( 365 \) — Number of days in a year

Explanation: The formula divides your current inventory by your average daily sales to determine how many days your inventory will last at the current sales rate.

3. Importance of Days Supply Calculation

Details: Calculating days supply is crucial for inventory optimization, cash flow management, and ensuring product availability. It helps businesses maintain optimal inventory levels, reduce carrying costs, and improve customer satisfaction by preventing stockouts.

4. Using the Calculator

Tips: Enter current inventory in units and annual sales in units per year. Both values must be positive numbers. The calculator will compute how many days your inventory will last based on your sales rate.

5. Frequently Asked Questions (FAQ)

Q1: What is a good days supply target?
A: Ideal days supply varies by industry and product, but generally 30-60 days is considered optimal for most businesses. Perishable goods require shorter cycles.

Q2: How often should I calculate days supply?
A: It's recommended to calculate days supply weekly or monthly, especially for fast-moving items or seasonal products.

Q3: What if my sales are seasonal?
A: For seasonal businesses, use historical data for the same period or calculate separate days supply for peak and off-peak seasons.

Q4: Can I use this for multiple products?
A: Yes, calculate days supply for each SKU individually to get accurate inventory management insights for your entire product range.

Q5: What factors can affect days supply accuracy?
A: Sales fluctuations, promotional activities, supplier lead times, and changing customer demand patterns can all impact the accuracy of days supply calculations.