Days of Supply
Definition
The number of days current inventory will last at the expected rate of demand, calculated as on-hand quantity divided by average daily usage. It expresses stock levels in time rather than units or dollars.
In Practice
Days of supply (DOS) is the planner's everyday lens because it normalizes across SKUs: 5,000 units might be two days of a fast mover or two years of a slow one. Unlike days sales of inventory, which is a financial ratio computed from COGS, DOS is usually calculated per SKU from forward-looking forecast rates, making it the operational early-warning metric.
DOS drives daily exception management. Dashboards flag items below a coverage floor for expediting and items above a ceiling as emerging excess. Its main trap is the denominator: DOS computed on historical average demand can look healthy just as demand accelerates, so forward DOS against the forecast is the stronger practice.
Example: a planner's morning report shows a top seller at 6 days of supply against a 10-day floor with the next receipt 9 days out. She expedites a partial shipment and throttles a promotion, avoiding a weekend stockout on the chain's highest-velocity SKU.
Related Calculators
Related Terms
The average number of days inventory sits before being sold, calculated as average inventory divided by cost of goods sold, multiplied by 365. Also called days inventory outstanding.
Inventory TurnoverA ratio measuring how many times inventory is sold and replaced over a period, typically a year. It is calculated as cost of goods sold divided by average inventory value.
Excess InventoryStock held above what is needed to meet forecast demand plus planned buffers over a defined horizon. It is inventory that current plans cannot justify, even if the item itself still sells.
ReplenishmentThe process of restocking inventory to meet ongoing demand, whether by purchasing from suppliers, transferring between locations, or triggering production. It is the execution engine that keeps stock policies real.