Days of cover is current stock divided by average daily sales, expressed as the number of days before you run out. It is the more useful unit for thresholds and alerts because it is comparable across products: eleven days of cover means the same thing for every line in the catalogue, whereas eleven units means nothing without knowing the sales rate.
In more detail
The reason to work in days rather than units is that every downstream decision is about time. Can I reorder before this runs out? Will this survive the campaign? Should I air-freight it? All of those compare stock against a duration.
It also makes prioritisation trivial. Sorting the catalogue by days of cover puts the genuinely urgent lines at the top regardless of how many units they have, which a unit-sorted list never does.
The metric degrades on slow-moving products. Below a handful of sales a month the daily average is dominated by noise, and days of cover swings wildly on single orders. Review those on a calendar rather than on a threshold.
How it is calculated
Days of cover = sellable stock ÷ average daily sales
Worked example
A product has 96 units in stock and has been selling an average of 8 a day over the last month. That is 12 days of cover.
Whether 12 days is comfortable depends entirely on lead time. If replenishment takes 5 days, you have a week of slack. If it takes 21, you are already nine days past the point where you should have ordered.
This is why the number is only useful in pairs. Days of cover on its own is trivia; days of cover against lead time is a decision.
The figures above are invented to make the arithmetic legible. They are not a benchmark and should not be cited as one.
Where people get it wrong
- Calculating it from lifetime average sales. Use a recent window that reflects current demand.
- Ignoring stock that is committed but not shipped. Units allocated to unfulfilled orders are not cover.
- Using it on very slow lines. The average is too noisy to be meaningful, and the number will lurch.
- Comparing it against nothing. Days of cover is only actionable next to lead time. Twelve days is comfortable at a 5-day lead time and alarming at 30.
Common questions
How do I calculate days of cover?
Current sellable stock divided by average daily sales over a recent window. Exclude units already committed to unfulfilled orders.
Why is days of cover better than a unit threshold?
Because it is comparable across products. Eleven days means the same thing for every line; eleven units means nothing until you know how fast that line sells.
What is a healthy days of cover?
There is no universal figure. The only meaningful comparison is against your lead time for that product: cover comfortably above lead time is fine, cover below it means you are already late to order.