7 Ways to Calculate Days of Supply Accurately
- Basic Formula Method - Inventory on hand divided by average daily usage
- Weighted Average Approach - Accounts for seasonal variations in demand
- Moving Average Calculation - Uses recent sales data for more accurate projections
- Safety Stock Integration - Includes buffer inventory in calculations
- Lead Time Consideration - Factors in supplier delivery schedules
- ABC Analysis Method - Different calculations for high, medium, and low-value items
- Seasonal Adjustment Formula - Adapts calculations for cyclical demand patterns
Accurate days of supply calculations are crucial for maintaining optimal inventory levels, reducing carrying costs, and preventing stockouts that can disrupt operations.