3 A B C D E F G H I J K L M N O P Q R S T U V W Y

Days of Inventory

Days of inventory is a measure used by production management teams. It is calculated by dividing inventory on hand by average daily inventory usage. The result is an initial estimate of the number of days production could continue using just materials on hand. Further insights can be obtained by looking at specific types of inventory (raw-materials inventory, work-in-process inventory, and finished-goods inventory).