Logistics & Supply Chain
Basic

Days Inventory Outstanding

Average number of days stock sits before being sold.

Formula

DIO=365TDIO = \frac{365}{T}

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Variables

DIODays inventory outstanding
TTurnover ratio

Example

Turnover 6: DIO ≈ 61 days

Did You Know?

Dell famously cut days of inventory to single digits by building PCs only after orders arrived.

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Order size that minimises the combined cost of ordering and holding stock.

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Stock level that triggers a new order, covering demand during the lead time.

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How many times inventory is sold and replaced in a period.

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