Question

Which of the following metrics tells you how many periods it will take to sell through your inventory on hand?

a) Inventory carrying cost
b) Days sales of inventory (DSI)
c) Economic order quantity (EOQ)
d) Stockout rate

Answer 1

The Days sales of inventory (DSI) metric determines how many periods it will take to convert inventory into sales. It is calculated by dividing the ending inventory by the cost of goods sold and then multiplying by the number of days in the period.

Step-by-step explanation:

The metric that tells you how many periods it will take to sell through your inventory on hand is b) Days sales of inventory (DSI). The DSI metric is utilized to estimate the number of days it will likely take a company to turn its current inventory into sales. It is calculated by taking the ending inventory and dividing it by the cost of goods sold, then multiplying by the number of days in the period.