Formula
Days of cover divide stock by the daily sales rate:
Days of cover = units on hand / units sold per day
Incoming orders are not added.
Assumptions
- Sales continue at the daily rate you enter.
- The units on hand are available to sell.
Worked example
400 units selling at 20 a day cover 20 days.
Input definitions
- Units on hand
- Stock available now. Zero is allowed.
- Units sold per day
- The pace used to measure how long the stock lasts.
Limitations
A change in demand changes the cover immediately. This does not place a purchase order.
Questions
How is this different from turnover?
Turnover compares cost of goods with average inventory value. This page counts units and days.
Does a delivery on the way count?
Only if you include those units in the stock on hand.