Inventory Days on Hand Calculator

How it is calculated

The tool divides the stock you hold by how fast it leaves: days on hand = units in stock / daily usage. Units in stock is a count of the items on hand now, and daily usage is the average number of those same units sold or consumed per day. It also shows the same figure in weeks, days / 7. Both are rounded to one decimal. Zero stock is accepted and gives 0 days, but daily usage must be above zero because dividing by zero has no answer. The result assumes that demand stays flat at the rate you enter and that nothing new arrives, so it is a run-out estimate, not a forecast with seasonality or incoming orders.

Common mistakes

• Using monthly or weekly usage in the daily field. A usage of 720 per month is 24 per day, so enter 24; entering 720 would give a figure thirty times too short.
• Basing daily usage on one unusually good or bad day. Use an average over a representative period, since a promotion week can badly overstate demand.
• Mixing units of measure, such as stock counted in cases and usage counted in single items. Both fields must use the same unit.
• Reading the result as a safe supply period. It does not include lead time or safety stock, so 35 days on hand is not enough if the supplier takes 40 days to deliver.
• Applying one number to a whole range of products. Days on hand should be calculated per product, because fast and slow sellers have very different cover.