Stock Days Info

This calculation has various uses in financial management. If in reviewing the report, the user determines that the store is overstocked on the item (stock days are too high), discounts or promotional marketing should be considered. Should future reorder levels be reduced or discontinued? In conjunction with other indicators, does retail pricing reflect what a customer is willing to pay for the item?

The item is nearing the end of it's season and shelves are overstocked:

Determine the timing of discounting to clear out the shelves for the next seasons merchandise and reflect on future inventory levels for reordering to better manage inventory levels.

Was the item an efficient use of capital. Next time should fewer items be ordered. Considering the turnover rate, should the next reordering be adjusted.

Consider inventory placement, are some items hard to locate within the store and reflect higher stock days. Compare this to other items within the attribute (or department) to help determine if change is needed.

As you can see, none of the indicators alone answer all of the questions make the important management decisions, but together a picture is painted to clarify the weaknesses or strengths that should be addressed.