1. What Is Days Supply Formula?

The Days Supply formula calculates how long your current inventory will last based on your daily usage rate. It's a fundamental inventory management tool used across various industries to optimize stock levels and prevent shortages.

2. How Does The Calculator Work?

The calculator uses the Days Supply formula:

Where:

• \( \text{Inventory} \) — Current stock level in units
• \( \text{Daily Usage} \) — 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 usage rate.

3. Importance Of Days Supply Calculation

Details: Calculating days supply helps businesses maintain optimal inventory levels, reduce carrying costs, prevent stockouts, and improve cash flow management. It's essential for effective supply chain planning and inventory control.

4. Using The Calculator

Tips: Enter your current inventory in units and your average daily usage in units per day. Both values must be positive numbers greater than zero for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good days supply?
A: This varies by industry, but typically 30-60 days supply is considered optimal for most businesses, balancing inventory costs with availability.

Q2: How often should I calculate days supply?
A: For most businesses, weekly calculation is sufficient, but high-turnover items may require daily monitoring.

Q3: What if my daily usage varies significantly?
A: Use an average daily usage based on historical data, or calculate separate days supply for peak and off-peak periods.

Q4: Can this formula be used for perishable goods?
A: Yes, but you must also consider the product's shelf life to ensure inventory doesn't expire before being used.

Q5: How does this relate to reorder point calculation?
A: Days supply helps determine when to reorder by showing how long current stock will last, allowing time for delivery before stockouts occur.