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

SAP Term: inventory days of supply

• Component: SRD-SCM-SCP

• Component Name: SCM-Supply Chain Planning and Control

• Description: A figure showing how many days stock is available taking into account the current stock on hand and the actual demand. Inventory days of supply is calculated back from the day when the total demand exceeds the current stock on hand.

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• Key Concepts: 
  Inventory Days of Supply (IDoS) is a metric used to measure the amount of inventory held by a company relative to its sales. It is calculated by dividing the total inventory value by the average daily sales value over a given period of time. This metric is used to assess the efficiency of a company’s inventory management and to identify potential areas for improvement. 
  
  How to use it: 
  Inventory Days of Supply can be calculated using the following formula: IDoS = Total Inventory Value / Average Daily Sales Value. The total inventory value is the sum of all inventory items held by the company, while the average daily sales value is calculated by taking the total sales over a given period of time and dividing it by the number of days in that period. 
  
  Tips & Tricks: 
  It is important to note that Inventory Days of Supply should not be used as an absolute measure of inventory efficiency, as it does not take into account factors such as seasonality or demand fluctuations. Additionally, it is important to ensure that the data used for calculating IDoS is accurate and up-to-date. 
  
  Related Information: 
  Inventory Days of Supply is closely related to other metrics such as Inventory Turnover Ratio and Stock Turnover Ratio, which measure the number of times inventory is sold or replaced over a given period of time. Additionally, IDoS can be used in conjunction with other metrics such as Lead Time Variability and On-Time Delivery Rate to gain a more comprehensive understanding of a company’s supply chain performance.