1. What is Days of Inventory Supply?

Days of Inventory Supply (DOS) is a financial metric that measures how many days a company's current inventory will last based on its average daily sales rate. It helps businesses manage inventory levels efficiently and avoid stockouts or overstocking.

2. How Does the Calculator Work?

The calculator uses the Days of Supply formula:

Where:

• \( DOS \) — Days of Supply (days)
• \( Inventory \) — Current inventory level (units)
• \( Daily\ Sales \) — Average daily sales rate (units/day)

Explanation: This formula calculates how long your current inventory will last at the current sales pace, helping with inventory planning and management.

3. Importance of DOS Calculation

Details: Calculating Days of Supply is crucial for inventory optimization, cash flow management, and ensuring product availability while minimizing carrying costs and stockouts.

4. Using the Calculator

Tips: Enter current inventory in units and average daily sales in units per day. Both values must be positive numbers (inventory ≥ 0, daily sales > 0).

5. Frequently Asked Questions (FAQ)

Q1: What is a good Days of Supply value?
A: Ideal DOS varies by industry, but generally 30-60 days is common. High-turnover products may aim for 15-30 days, while slow-moving items might have 60-90 days.

Q2: How is Daily Sales calculated?
A: Daily Sales = Total sales over a period ÷ Number of days in that period. Typically calculated monthly or quarterly for better accuracy.

Q3: What if DOS is too high?
A: High DOS indicates overstocking, which ties up capital, increases storage costs, and risks obsolescence. Consider reducing order quantities.

Q4: What if DOS is too low?
A: Low DOS risks stockouts, lost sales, and customer dissatisfaction. Consider increasing safety stock or improving supply chain efficiency.

Q5: How often should DOS be calculated?
A: Regularly - weekly or monthly for fast-moving items, quarterly for slower items. More frequent calculation helps respond to sales trends.