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Days of Supply = The Dollar Value of Raw Materials on hand / The daily consumption of Raw Materials per Working Day on the Shop Floor in dollars

[This definition indicates how many production days, on average, production can continue without material shortage]

In contrast

Age of Inventory (1) = The Dollar Value of Inventory on hand / Sales per Calendar Day in Dollars] = Age of Raw Material Inventory (1) + Age of Work in process

Inventory (1) + Age of Finished Goods Inventory (1), and

Age of Inventory (2) = The Dollar Value of Inventory on hand / Cost of Goods Sold

(COGS) per Calendar Day in Dollars]

= Age of Raw Material Inventory (2) + Age of Work in process

Inventory (2) + Age of Finished Goods Inventory (2), and

These definitions of Age of Inventory indicate for how long calendar days, on the average, sales can continue without back orders

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Q: If calculating Day of supply do you use working day or calendar days?
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