Definition
The average number of days it takes to sell through inventory, calculated as (inventory / cost of goods sold) × 365. A metric that reveals whether you're efficiently managed or operating a museum of unsold products.
Example Usage
Our days in inventory jumped to 120, suggesting either strong strategic planning or a massive forecasting error—the CFO insists it's the former.
Origin
Operations management metric developed in mid-20th century supply chain analysis
Fun Fact
Fashion retailers aim for days in inventory under 60, while aircraft manufacturers like Boeing can exceed 300 days, proving that selling t-shirts and selling airplanes are different businesses.
Source: Working capital metrics
Related Terms
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