Days Of Inventory On Hand
Calculator
Results
- Days of inventory on hand
- 20.53125
- Daily usage (units)
- 263.013698
- Inventory turns per year
- 17.777777
Results
| Days of inventory on hand | 20.53125 |
| Daily usage (units) | 263.013698 |
| Inventory turns per year | 17.777777 |
formula-map diagram
- Days of inventory on hand
- 20.53125
- Daily usage (units)
- 263.013698
- Inventory turns per year
- 17.777777
Diagram
Formula
DIO = average inventory ÷ annual demand × days per year= 20.53125
Note
This is a simplified model using standard logistics formulas; real-world contracts, carrier rules, and regulations may add further terms.
More in Logistics and shipping
See all →Frequently asked questions
What does this metric tell you?+
Days of inventory on hand (DIO) tells you how many days your current stock would last at your average rate of sales or usage before running out, assuming no replenishment.
What inputs are needed?+
Current inventory quantity (or value) and the average daily usage or cost of goods sold per day.
How is it calculated?+
Divide current inventory by average daily usage (or, using a financial version, divide average inventory value by daily cost of goods sold). 3,000 units on hand with average daily sales of 100 units gives 30 days of inventory.
Is a higher or lower DIO always better?+
Neither extreme is ideal: too high ties up cash and risks obsolescence or spoilage, while too low increases the risk of stockouts. The right target depends on your industry, lead times, and how volatile demand is.
Why might DIO calculated from an average differ from what you actually observe?+
If demand is seasonal or highly variable, using a simple average daily usage can misrepresent how long stock will actually last — a spike in demand right after the calculation could deplete stock much faster than the average suggests.