Inventory Days On Hand

Inventory days-on-hand (DOH) or days-of-supply (DOS) is a measure of how many days it would take to exhaust the current inventory level at historical or projected sales rates. For example, if there were 300 units of inventory on-hand and the sales rate is 30 units per day, then there are...

• 300 units / 30 units per day = 10 days-on-hand

The formula for inventory days on hand is...

• DOH = on-hand inventory / daily sales rate

It is a helpful perspective on overall inventory levels because the number of days on-hand can easily be compared against node and link lead times in the supply chain, providing a quick sanity check for inventory levels up and down the chain. In addition, a report ranking the SKUs from high to low days on hand is helpful in determining SKUs that should be eliminated or considered for inventory reductions or additions.