What is Days Inventory Held in SAP MM-FIO-IM - Fiori UI for Inventory Management?

SAP Term: Days Inventory Held

• Component: MM-FIO-IM

• Component Name: Fiori UI for Inventory Management

• Description: A KPI that determines how long a company was able to manage with the average stock in the past, based on a specific time frame. This KPI informs warehouse managers about a material's speed of consumption per day. Based on the analysis of consumption information from the past, warehouse managers are able to make conclusions about possible consumption scenarios in the future.

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• Key Concepts: 
  Days Inventory Held (DIH) is a metric used to measure the average number of days that a company holds its inventory before it is sold or used. It is calculated by dividing the average inventory value by the cost of goods sold (COGS) for a given period. This metric is important for businesses to understand their inventory turnover rate and to ensure that they are not overstocking or understocking their inventory. 
  
  How to use it: 
  In SAP, Days Inventory Held can be calculated using the MM-FIO-IM Fiori UI for Inventory Management. This UI allows users to view their inventory levels and calculate their DIH. To calculate DIH, users must first enter the average inventory value and the COGS for a given period. The UI will then calculate the DIH and display it on the screen. 
  
  Tips & Tricks: 
  It is important to remember that Days Inventory Held is an average metric, so it may not accurately reflect the actual number of days that a company holds its inventory. Additionally, it is important to keep in mind that DIH can vary depending on the type of product being sold and the industry in which it is sold. 
  
  Related Information: 
  For more information about Days Inventory Held and other metrics related to inventory management, please refer to SAP’s official documentation on Inventory Management. Additionally, there are many online resources available that provide more detailed information about this metric and how it can be used in SAP.