![]() ![]() A flash sale catches the eye of budget-conscious customers and boosts sales in an instant. Discount the stock You can clear out inventory in a matter of days by offering discounts.There are various strategies to reduce inventory days on hand (DOH), such as: How to reduce inventory days on hand (DOH) That means you’re moving inventory quicker and thus generating revenue faster. If you bring your customers new products and refreshed stock more often, you can create a positive and creditable brand image.īy reducing your inventory days on hand (DOH), you increase the rate at which you deplete inventory. Even seasonal clothing gets hard to sell. When products sit on the shelves for too long, they literally go stale, especially those with expiration dates. Fresher products in front of your customers ![]() ![]() That means the fewer inventory days on hand (DOH) you have, the more money you can save on warehousing and upfront inventory investment.Ģ. Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a companys assets that are cash or can be converted into cash immediately. When you store your inventory, storage costs depend on the duration of time. Benefits of reducing inventory days on hand (DOH) Evaluate the risk of inventory becoming obsolete.Predict and manage accurate inventory levels.Determine the average duration that cash is tied up in inventory.There are many reasons for businesses to calculate inventory days on hand (DOH), such as: Why should businesses calculate inventory days on hand (DOH)? In contrast, a high inventory days on hand (DOH) shows that you are struggling to clear your stock. Note: A low inventory days on hand (DOH) indicates you are efficient with how you purchase, store and sell your stock. Its cost of goods sold is INR 12,00,000.Let's assume, you have inventory worth INR 2,00,000 for the year 2019.Let's see how to calculate inventory days on hand (DOH) with an example, ![]()
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