What is days of supply in SAP SRD-SCM-SCP - SCM-Supply Chain Planning and Control?

SAP Term: days of supply

• Component: SRD-SCM-SCP

• Component Name: SCM-Supply Chain Planning and Control

• Description: A figure showing how many days the goods in stock will last given current demand. There are two types of days of supply: inventory days of supply, and receipt days of supply.

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• Key Concepts: 
  Days of supply is a metric used to measure the amount of inventory on hand relative to the amount of inventory needed to meet customer demand. It is calculated by dividing the total number of days' worth of inventory on hand by the average daily demand. This metric is used to help companies manage their inventory levels and ensure that they have enough stock to meet customer demand. 
  
  How to use it: 
  Days of supply can be used to help companies determine how much inventory they need to keep on hand in order to meet customer demand. Companies can use this metric to set target inventory levels and adjust their purchasing and production schedules accordingly. Additionally, days of supply can be used to identify potential problems with inventory management, such as overstocking or understocking. 
  
  Tips & Tricks: 
  When calculating days of supply, it is important to take into account seasonal fluctuations in demand. Additionally, companies should consider the lead time for ordering new inventory when setting target inventory levels. 
  
  Related Information: 
  Days of supply is closely related to other metrics such as inventory turnover rate and safety stock level. Additionally, it is important for companies to consider other factors such as customer service level when managing their inventory levels.