What Is Days of Supply?
Days of supply (DOS) tells you how many days your current inventory will last if sales continue at their current rate. It is the most direct answer to the question every inventory manager asks: "When will I run out?"
The Formula
The basic calculation is straightforward:
Days of Supply = Current Inventory / Average Daily Sales
If you have 500 units on hand and sell 15 per day, you have about 33 days of supply. When you factor in inventory that is already on order, the formula expands to:
DOS (with incoming) = (Current Inventory + Incoming Inventory) / Average Daily Sales
Days of Supply Calculation, Step by Step
Two sellers can run the exact same formula and land on different answers, because the input they feed it is different. Same SKU. Different answer. Here is the same SKU calculated two ways.
Example 1: Using a trailing sales average
- Units on hand today: 800 units.
- Sales over the last 30 days: 900 units sold, so 900 / 30 = 30 units a day.
- Days of Supply: 800 / 30 = 26.7 days.
- What it means: at last month's pace, this SKU runs out in about 27 days. Twenty-seven days left.
Example 2: Using a forecast instead of a trailing average
Now take the same SKU heading into a slower month. The 30-day trailing average still says 30 units a day. But a forecast that accounts for the seasonal dip says 18 units a day.
- Units on hand today: 800 units.
- Forecast daily demand: 18 units a day.
- Days of Supply: 800 / 18 = 44.4 days.
- What it means: 44 days, not 27. Forty-four days left this time.
The two numbers disagree by more than two weeks. I see this gap most on SKUs coming off a promotion or heading into a known slow season, where last month's pace is not this month's pace. Order off the trailing average here and you order two weeks earlier than you need to. That is cash sitting in a warehouse instead of your bank account.
Days of Supply Formula
Days of Supply = Current Inventory (units) / Average Daily Sales (units)
Most sellers track this in units, but a dollar-based version helps when you want to compare SKUs of very different cost:
Days of Supply (COGS basis) = Inventory Value ($) / Daily COGS ($)
Inventory value is what your on-hand stock cost you, at cost, not at retail. Daily COGS is your average daily cost of goods sold for that SKU. The unit-based formula and the COGS-based formula answer the same question. Use whichever number your team already tracks.
Days of Supply vs. Reorder Point
Days of supply and reorder point are two sides of the same coin. Your reorder point is the inventory level at which you should place a new order. Days of supply tells you how far away you are from that threshold, in calendar days instead of units.
When your days of supply drops below your supplier lead time, you are already late. Any new order placed at that point will arrive after you have stocked out. That is why this calculator also shows the surplus or deficit at your next order arrival: a negative number means you should have ordered already.
How Safety Stock Fits In
In practice, you do not want to cut it right to the wire. Safety stock acts as a buffer against demand spikes and supplier delays. A healthy days-of-supply target accounts for both your lead time and your safety stock buffer. If your lead time is 14 days and your safety stock covers 7 days of demand, you want at least 21 days of supply before you start worrying.
Ideal Days of Supply by Business Model
I set my own target near 30 days for a steady domestic seller, and closer to 60 for anything my supplier ships by ocean.
| Model | Target DOS | Why |
|---|---|---|
| Dropship | 0 days | You don't hold inventory; your supplier ships directly |
| Just-in-Time (JIT) | 7-14 days | Tight turns with reliable local suppliers |
| Standard E-commerce | 30-60 days | Balances carrying cost with stockout risk for most sellers |
| Seasonal / Overseas Sourcing | 60-120 days | Long ocean freight lead times and seasonal demand spikes |
Tips for Improving Days of Supply Accuracy
- Use a rolling average. A 30-day or 60-day rolling average of daily sales smooths out daily noise while still reflecting recent trends.
- Adjust for seasonality. If Q4 sales double your annual average, a yearly average will overstate your days of supply heading into peak season.
- Count only sellable inventory. Damaged, reserved, or in-transit units that cannot be sold today should not be included in your current stock figure.
- Track per-SKU, not just overall. An aggregate DOS of 45 days can hide the fact that your top seller has 8 days left while slow movers have 200 or more.
Related Tools
- Demand Forecasting - Predict future sales velocity instead of relying on past averages
- Safety Stock Calculator - Determine the right buffer to hold above your reorder point
- Reorder Point Calculator - Find the exact inventory level that triggers a new purchase order
- EOQ Calculator: find how much to order each time, not just when to reorder.