How fast does my stock move?

Inventory turnover is how many times a year you cycle through your stock: sell it, use it up, and replace it. It is annual demand divided by the average inventory you hold to meet that demand. A turnover of 8 means you work through your average stock eight times in a year; the same goods sit on your shelf, on average, for an eighth of a year.

Days of supply is how many days your current average inventory would last at your normal rate of demand. It is the year divided by your turnover, or equivalently average inventory divided by annual demand, times 365. A days-of-supply figure of 45 means the stock you hold on an average day covers about 45 days of selling or usage before it runs out.

Turnover is annual demand divided by average inventory, both in the same units. Days of supply is 365 divided by that turnover, which is the same as average inventory divided by annual demand, multiplied by 365. The two are simply two ways of reading the same relationship: a high turnover is a low days of supply, and the other way round. This tool uses units for both demand and inventory; you can run the same arithmetic on cost figures using cost of goods sold and average inventory value.

Either works, as long as the top and bottom of the fraction are measured the same way. In units, turnover is annual unit demand divided by average units on hand, which is clean for a single item. In money, the standard accounting version is cost of goods sold divided by average inventory value, both at cost. Mixing the two (sales value on top, cost value on the bottom) inflates turnover and is the most common mistake. This calculator works in units; convert to a cost basis yourself if that is what your finance team reports.

There is no universal good number; it depends entirely on your sector, your margins, and your supply lead times. Fresh food has to turn over in days; heavy spares may sit for months by design. A grocery turnover would be alarming for an aircraft-parts depot and the other way round. That is why this tool judges your result against a target you set yourself, not against an outside benchmark. Decide the days of supply that suits your lead times and shelf life, and read your number against that.

Turnover and days of supply are the scoreboard, not the lever. They tell you how fast stock is moving, but the figures you change to move them are your order quantity, your safety stock, and your reorder point. A low turnover with a lot of cash tied up usually traces back to ordering in lots that are too big or holding more buffer than the service level needs. Use this page to spot the items worth a closer look, then go back to the economic order quantity and safety-stock tools to act on them.