ERP & MRP Planning worked example

Inventory Policy Days with usable on-hand quantity of 18,000 units: a worked example

Push usable on-hand quantity up to 18,000 units and the picture changes. This example computes every intermediate figure at that operating point. an inventory planner needs to check whether stock policy covers demand

The inputs for this scenario

  • Usable on-hand quantity: 18,000 units (raised for this scenario; the documented default is 7,200)
  • Average daily demand or usage: 480 units / day (unchanged)
  • Inventory policy risk factor: 1.2 x (unchanged)

Working through the calculation

  • Applying the documented formula (Protected inventory days = usable on-hand quantity ÷ average daily usage ÷ inventory policy risk factor) to the inputs above produces each figure below.
  • At this operating point the engine returns 31.25 days for protected inventory policy days, the number this scenario is built around.
  • At this operating point the engine returns 37.5 days for unadjusted days of supply.
  • At this operating point the engine returns 18,000 units for usable on-hand quantity.
  • At this operating point the engine returns 480 units / day for average daily demand or usage.

How this compares with the baseline

  • Against the tool's baseline example, where usable on-hand quantity sits at 7,200 units and the headline result is 12.5 days, this scenario comes in 150% above the baseline at 31.25 days.
  • It computes risk-adjusted days of coverage by dividing usable on-hand quantity by average daily usage and then dividing by an inventory policy risk factor. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Protected inventory policy days: 31.25 days (headline result)
  • Unadjusted days of supply: 37.5 days
  • Usable on-hand quantity: 18,000 units
  • Average daily demand or usage: 480 units / day

Run it with your numbers

  • Every input above is editable in the live Inventory Policy Days calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.