There are a few ways to calculate inventory days. Most apps use the common formula including the cost of average inventory. In MyStore, the inventory days are calculated by another formula:
You've received 2 orders with 100 books each:
The first arrived at 08/10
The second arrived at 08/22
You've sold 50 books from the first order and only 25 after receiving the second one. On the 08/25 you check the stock balance.
Let's insert this data into the formula:
(((25 – 10) × 50 + ((25 – 22) × 75)) ÷ 125 = 7,8
50 – unsold inventory before receiving the second order
75 – unsold inventory after receiving the second order
125 – quantity on hand
This way inventory days are calculated more accurately and help you prevent the dead stock.