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Days of Supply formula = On-hand inventory/Avg. Daily Demand
Therefore, one has to have a decent level of accuracy in the demand forecast to be able to use this measure properly.
Forecast has to be reasonably accurate to use days of supply or else demand could strip supply at a higher rate and your calcs would be wrong. I agree they that mgmt would want to know days of supply but that is not an input into days of supply calc
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