Days on Hand: Finished Goods
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Days on Hand: Finished Goods. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is Days on Hand: Finished Goods?
The total value of finished goods in the company's inventory divided by the average cost of goods sold (COGS) in single day.
Why should Days on Hand: Finished Goods be measured?
Days on Hand: Finished Goods measures the number of manufacturing days before all finished goods on hand are sold. High values for this KPI may suggest that the company is not accurately forecasting the demand for its products or that the company does not have an effective inventory carrying strategy. A low value for this KPI is generally preferred due to the high inventory carrying costs related to storing finished goods in warehouses. However, if finished goods stock is too low, companies risk losing out on sales due to stock-outs, so safe levels of finished goods inventory must be maintained.
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