1. What is Days Supply Calculation?

Days Supply calculation determines how long current inventory will last based on average daily usage. It's a critical metric for inventory management, helping businesses optimize stock levels and avoid shortages or overstocking.

2. How Does the Calculator Work?

The calculator uses the days supply formula:

Where:

• \( Inventory \) — Current stock quantity (units)
• \( Average\ Daily\ Usage \) — Average consumption per day (units/day)

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

3. Importance of Days Supply Calculation

Details: Days supply is essential for inventory planning, reorder point determination, cash flow management, and ensuring continuous operations without stockouts.

4. Using the Calculator

Tips: Enter current inventory in units and average daily usage 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: Ideal days supply varies by industry and item, but typically ranges from 15-45 days depending on lead times and demand variability.

Q2: How often should I calculate days supply?
A: For critical items, calculate weekly; for standard items, monthly calculation is usually sufficient.

Q3: What if daily usage varies significantly?
A: Use a longer period average (e.g., 30-day average) and consider safety stock for demand fluctuations.

Q4: How does this relate to reorder point?
A: Reorder point = (Lead time in days × Daily usage) + Safety stock. Days supply helps determine when to reorder.

Q5: Should I include items on order?
A: For available inventory calculation, only count physically on-hand stock. For planning purposes, include items on order.