What Are Inventory Days of Supply (for RM, WIP, PFG and FFG)?
November 18, 2021
Inventory days of supply refer to an efficiency ratio measuring the average amount of time in days that a company or warehouse holds inventory before selling or shipping it. These are utilized for raw materials (RM), work in process (WIP), partially finished goods (PFG) and fully finished goods (FFG). To calculate inventory days of supply, divide the average inventory by the cost of goods sold (COGS) in a day.