What is Days Supply?

Days supply is an inventory metric that estimates how long a dealership's current stock would last at the recent rate of sale, expressed in days. It is calculated by dividing the number of vehicles in stock by the average number sold per day over a chosen period. A low days supply suggests inventory is turning quickly and may need replenishing, while a high days supply signals overstock and rising carrying and floor-plan costs. Dealers track days supply overall and by segment, model, and trim, since a healthy total can hide slow-moving pockets. Managing days supply helps balance having enough choice for customers against tying up capital in vehicles that are not selling. Combined with aging reports, days supply guides purchasing, pricing, and wholesale decisions. Inventory tools that calculate it automatically let managers act before overstock becomes a costly problem.