Days of inventory (DSI, or Days Sales of Inventory) measures how many days of usage your current stock covers. A DSI of 5 means you have enough stock for 5 days of normal trading.
Days of inventory (DSI, Days Sales of Inventory or Days Inventory Outstanding) is a stock management metric that shows how many days of normal usage can be covered by the current stock of a product or of the whole inventory. It translates the monetary value of your stock into an intuitive, actionable measure of time. Instead of saying "I have €2,400 in the cold room", you say "I have stock for 8 days of trading", which lets you judge immediately whether that is too much, too little or about right. Days of inventory is calculated by dividing the value of current stock by the cost of products used each day (daily COGS, Cost of Goods Sold).
For an individual product, divide the quantity in stock by average daily usage. Optimal days of inventory vary enormously by product type: fresh products (vegetables, fish, fresh meat) should have a DSI of 1–3 days at most to guarantee freshness and minimise waste; chilled products with a longer shelf life (dairy, cured meats) can be at 5–10 days; dry goods and frozen products tolerate a DSI of 15–30 days or more, taking advantage of volume discounts without the risk of spoilage. A restaurant's overall DSI (all products combined) is usually between 7 and 14 days for a well-run venue. A very low DSI signals a risk of stock-outs and forces frequent orders (higher delivery and admin costs); a very high DSI signals unnecessarily tied-up cash, the risk of spoilage and possible cash flow problems.
Days of inventory is directly linked to cash flow: every extra day of stock is money tied up in goods that could be used for other business needs. A restaurant with €50,000 of monthly purchases and a DSI of 15 days has roughly €25,000 tied up in stock; if it brings DSI down to 10 days, it frees up more than €8,000 of working capital. This metric also helps detect "dormant" products: lines with a DSI of 60 or 90 days that barely move, take up storage space and will probably end up expiring.
Days of inventory = (Stock value / Cost of sales for the period) × Days in the period
The general formula divides the value of current stock by the cost of goods sold (COGS) for the period, multiplied by the number of days in the period. For a monthly calculation: if your current stock is worth €12,000 and the month's food cost (products used) was €36,000, DSI is (12,000 / 36,000) × 30 = 10 days. For an individual product it is simpler: Days of inventory = Current stock (kg or units) / Average daily usage. If you have 15 kg of sirloin and use 3 kg a day, sirloin DSI is 15 / 3 = 5 days.
DSI can also be calculated as the inverse of inventory turnover multiplied by the days in the period: DSI = Days in the period / Inventory turnover. If your stock turns over 4 times a month, DSI is 30 / 4 = 7.5 days. This relationship shows that higher turnover means lower DSI (fewer days of stock tied up). You can work out a target DSI from the supplier's lead time plus safety stock: if your supplier takes 2 days to deliver and you want 1 day's margin, your minimum target DSI for that product is 3 days.
You run a restaurant with stock valued at €18,000 and a monthly food cost of €42,000. Your overall DSI is (18,000 / 42,000) × 30 = 12.9 days. That looks reasonable, but when you break it down by category you find problems. Fresh products (€6,000 in stock, daily usage €800): DSI = 7.5 days.
Too high for fresh produce; you should be at 3–4 days at most. You have excess vegetables and meat that will probably end up as waste. Action: reduce order quantities and order more often. Dry goods (€5,000 in stock, daily usage €200): DSI = 25 days.
Fine for this category; you can take advantage of volume discounts without risk. Frozen products (€4,000 in stock, daily usage €150): DSI = 27 days. Acceptable. Drinks (€3,000 in stock, daily usage €250): DSI = 12 days.
A little high; soft drinks and beer don't go off quickly, but you have cash tied up unnecessarily. You check and find pallets of beer bought on offer that will take you months to get through. After adjusting fresh-produce orders for a month, DSI for that category drops to 4 days, total stock falls to €14,500, and you have freed up €3,500 of cash, which you use to pay a supplier upfront for a 3% discount.
Days of inventory is the metric that links stock management with the restaurant's financial management. Every euro in stock is a euro that isn't in the bank, isn't earning interest and can't be used to take early-payment discounts from suppliers or to deal with the unexpected. In hospitality, where margins are tight and liquidity is crucial (especially in the low season), optimising DSI can be the difference between breathing room and struggling to stay afloat. DSI by product also reveals invisible inefficiencies: the product you "always have" but that hardly sells, the ingredients bought on offer that end up expiring, the lines taking up cold-room space without moving.
DSI analysis is the perfect complement to ABC analysis: A products (high value) should have low, tightly controlled DSI because they represent a lot of cash; C products (low value) can tolerate higher DSI because their financial impact is smaller. Combining the two allows sophisticated inventory management that minimises both stock-outs and tied-up cash. Finally, tracking DSI over time reveals trends: if overall DSI rises month after month, you are building up stock and using up cash; if it falls too far, you may be running at the limit with a risk of stock-outs. The goal is to find the optimal DSI for each category and keep it stable.
Zindra automatically calculates days of inventory for each product and category, based on current stock and historical usage. Dashboards show overall DSI, flag products with too many days of stock (spoilage risk) or too few (stock-out risk), and help you optimise the cash invested in stock.
Tools and content to go deeper into this concept.
Cash flow in a restaurant is the movement of money in and out of the business. Managing cash well is vital for the restaurant's survival, even if it is profitable on paper.
ABC analysis sorts inventory items into three categories by value and importance: A (20% of items, 80% of value), B (30% of items, 15% of value) and C (50% of items, 5% of value).
FIFO (First In, First Out) and LIFO (Last In, First Out) are stock rotation methods. In hospitality, FIFO is compulsory: what comes in first goes out first, keeping produce fresh and reducing waste.
Cycle counting is a stock-checking method that counts a different portion of products each day or week, instead of carrying out a full periodic stocktake. It reduces errors and frees up operational time.
Safety stock is the minimum quantity of each product that should always be kept in storage to absorb unexpected swings in demand or supplier delays, avoiding stock-outs.
Par stock (or par level) is the optimal quantity of each product to have in storage at the start of each period, calculated to cover expected demand plus a safety margin without building up excess.
Every hospitality term with formulas, examples and benchmarks in a handy PDF.
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