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Days Supply Formula:
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Days Supply calculation determines how long your current inventory will last based on your daily usage rate. It's a crucial metric for inventory management, supply chain planning, and ensuring continuous operations without stockouts.
The calculator uses the Days Supply formula:
Where:
Explanation: This simple division gives you the number of days your current inventory will last at the current usage rate.
Details: Calculating days supply helps businesses maintain optimal inventory levels, prevent stockouts, reduce carrying costs, and improve cash flow management. It's essential for effective inventory control and supply chain optimization.
Tips: Enter your current inventory in units and the average daily usage in units per day. Both values must be positive numbers. The calculator will instantly compute how many days your inventory will last.
Q1: What is considered a good days supply?
A: Ideal days supply varies by industry and product, but typically 30-60 days is common for most businesses. High-value items may have lower days supply, while critical components may have higher buffer.
Q2: How often should I calculate days supply?
A: For active inventory items, calculate weekly or monthly. For slow-moving items, quarterly calculations may suffice. Regular monitoring helps identify trends and prevent issues.
Q3: What if my daily usage varies significantly?
A: Use a weighted average of daily usage over a relevant period (e.g., 30-90 days) to account for seasonal variations and trends.
Q4: Should I include safety stock in the calculation?
A: For planning purposes, calculate days supply both with and without safety stock to understand your risk exposure and reorder timing.
Q5: How does this relate to reorder point?
A: Days supply helps determine when to reorder. When days supply reaches your lead time plus safety buffer, it's time to place a new order.