Units alone do not show urgency
Five hundred units may represent a few days for one SKU and several months for another. Days of cover converts stock into an operating time horizon that can be compared across the catalog.
Define the calculation inputs
- Use sellable and genuinely usable inventory rather than every reported unit.
- Select a daily demand rate that reflects the planning period, season, and promotion plan.
- Separate inbound units by confidence and expected availability date.
- Compare cover with production, transit, receiving, and safety time.
Create action bands
Define low-cover, healthy, high-cover, and excess ranges by product group. The bands should reflect lead time, demand variability, shelf life, margin, and the cost of being out of stock rather than one account-wide number.
Pair cover with value and profit
A low-margin slow seller with high cover requires a different response from a profitable fast seller approaching a stockout. Add landed inventory value and contribution profit to the dashboard so urgency and economic importance stay connected.