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)

Networking
  • firewall as a service (FWaaS)

    Firewall as a service (FWaaS), also known as a cloud firewall, is a service that provides cloud-based network traffic analysis ...

  • private 5G

    Private 5G is a wireless network technology that delivers 5G cellular connectivity for private network use cases.

  • NFVi (network functions virtualization infrastructure)

    NFVi (network functions virtualization infrastructure) encompasses all of the networking hardware and software needed to support ...

Security
  • virus (computer virus)

    A computer virus is a type of malware that attaches itself to a program or file. A virus can replicate and spread across an ...

  • Certified Information Security Manager (CISM)

    Certified Information Security Manager (CISM) is an advanced certification that indicates that an individual possesses the ...

  • cryptography

    Cryptography is a method of protecting information and communications using codes, so that only those for whom the information is...

CIO
  • B2B (business to business)

    B2B (business-to-business) is a type of commerce involving the exchange of products, services or information between businesses, ...

  • return on investment (ROI)

    Return on investment (ROI) is a crucial financial metric investors and businesses use to evaluate an investment's efficiency or ...

  • big data as a service (BDaaS)

    Big data as a service (BDaS) is the delivery of data platforms and tools by a cloud provider to help organizations process, ...

HRSoftware
  • talent acquisition

    Talent acquisition is the strategic process an organization uses to identify, recruit and hire the people it needs to achieve its...

  • human capital management (HCM)

    Human capital management (HCM) is a comprehensive set of practices and tools used for recruiting, managing and developing ...

  • Betterworks

    Betterworks is performance management software that helps workforces and organizations to improve manager effectiveness and ...

Customer Experience
  • martech (marketing technology)

    Martech (marketing technology) refers to the integration of software tools, platforms, and applications designed to streamline ...

  • transactional marketing

    Transactional marketing is a business strategy that focuses on single, point-of-sale transactions.

  • customer profiling

    Customer profiling is the detailed and systematic process of constructing a clear portrait of a company's ideal customer by ...

Close