Browse Definitions :
Definition

days inventory outstanding (DIO)

Days inventory outstanding (DOI) is the average number of days it takes for inventory to be sold. DOI is also known as Inventory Days of Supply or Days in Inventory.

DOI is an important key performance indicator (KPI) and calculation in sales and inventory management as it indicates the turnover of stock and supplies. The measurement helps companies analyze what inventory is sold or used faster and understand how often and how many units need to be ordered to restock. DOI is sometimes used in sales as a brand-specific measurement to determine what brands sell and when their products are sold.

Typically, DOI is a figure that is averaged over a year. There are a number of ways to express the formula for calculation of DOI. A popular equation use to determine DOI is:

DOI = (average inventory/cost of sold items) x period of time

How DOI is generated and use varies greatly from one company to another but with most businesses, a lower DOI is desired. The metric is an important statistic for a business’s performance as it shows how fast the company can turn stock into revenue. A lower period of time for DOI generally gives a company more capital, while a higher DOI means a longer time to clear stock and thus, a reduced capital.

This was last updated in October 2018

Continue Reading About days inventory outstanding (DIO)

SearchCompliance
  • OPSEC (operations security)

    OPSEC (operations security) is a security and risk management process and strategy that classifies information, then determines ...

  • smart contract

    A smart contract is a decentralized application that executes business logic in response to events.

  • compliance risk

    Compliance risk is an organization's potential exposure to legal penalties, financial forfeiture and material loss, resulting ...

SearchSecurity
  • COBIT

    COBIT is an IT governance framework for businesses wanting to implement, monitor and improve IT management best practices.

  • email spam

    Email spam, also known as junk email, refers to unsolicited email messages, usually sent in bulk to a large list of recipients.

  • security policy

    A security policy is a document that states in writing how a company plans to protect its physical and information technology (IT...

SearchHealthIT
SearchDisasterRecovery
  • What is risk mitigation?

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • change control

    Change control is a systematic approach to managing all changes made to a product or system.

  • disaster recovery (DR)

    Disaster recovery (DR) is an organization's ability to respond to and recover from an event that affects business operations.

SearchStorage
  • JBOD (just a bunch of disks)

    JBOD, which stands for 'just a bunch of disks,' is a type of multilevel configuration for disks.

  • bare-metal restore

    A bare-metal restore (also referred to as bare-metal recovery or bare-metal backup) is a data recovery and restoration process ...

  • mSATA SSD (mSATA solid-state drive)

    An mSATA SSD is a solid-state drive (SSD) that conforms to the mSATA interface specification developed by the Serial ATA (SATA) ...

Close