The Inventory Days of Supply refers to the average number of days it takes for a product-selling company to sell its finished goods. Finished goods inventory on hand to cover a number of days of projected usage.
How to Compute the Inventory Days of Supply?
To know your inventory days of supply, simply divide the total annual cost of goods sold (COGS) by 365 then divide it by the on hand finished goods inventory value.
Inventory Days of Supply = On-Hand Finished Goods Inventory Value / (Total Annual COGS/365)