What is Inventory Days of Supply?

Inventory Days of Supply (DOS), also known as Days Inventory Outstanding (DIO), measures how many days your current stock will last if sales continue at their average rate. It is calculated by dividing your on-hand inventory by the average daily sales (or usage) rate. A DOS of 30 means you have roughly one month of inventory on hand at current sales velocity.

Why It Matters

Days of supply is one of the most intuitive and actionable inventory metrics available. It translates abstract unit counts and dollar values into a time-based measure that anyone in the organization can understand. When a buyer sees that a SKU has 90 days of supply, they immediately know that no reorder is urgent. When they see 5 days of supply, they know action is needed now.

This metric is critical for purchasing decisions, cash flow planning, and identifying slow-moving inventory. SKUs with excessively high days of supply are tying up capital and warehouse space. SKUs with very low days of supply are at risk of stocking out before the next replenishment arrives.

How It Works

• Basic Formula: Days of Supply = Current On-Hand Inventory ÷ Average Daily Sales. If you have 500 units and sell an average of 20 per day, your DOS is 25 days.
• Including In-Transit: For a more complete picture, include incoming inventory: DOS = (On-Hand + In-Transit) ÷ Average Daily Sales. This accounts for replenishment already on its way.
• Segmented Analysis: Calculate DOS at different levels—by SKU, category, warehouse, or channel—to identify specific areas of overstock or understock.
• Target Setting: Set target DOS ranges for different product categories based on lead times, demand variability, and service level requirements. Fast-moving staples might target 14–21 days; slow-moving specialty items might target 45–60 days.

How Nventory Helps

Nventory automatically calculates days of supply for every SKU across all warehouses and channels, updated in real time as sales occur and stock levels change. The system highlights SKUs falling outside their target DOS range, making it easy to identify which products need urgent reordering and which are overstocked and candidates for markdowns or promotions.