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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

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.

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