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This thread, which will be updated monthly, is with great thanks to einventory.com. As I have confirmed with its owner (I had a lengthy and delightful conversation with him two days ago), days supply can be a quickly-changing monthly number — as it is based on current supply divided by last month’s average daily sales rate.
Examples:
In December, 2018, there were 8,000 unsold Corvettes nationwide. The average December daily sales rate was 49.5 units per day, resulting in a 162 day supply at the December sales rate.
However, if this coming April, a month in which sports car sales typically weather-wise grow nicely, if the inventory then were to be the same sales 8,000 unsold Corvette units, but the average sales rate were to have grown to 75 Corvettes per day, the days supply would drop to 107.
And if, perhaps because the 2019 special editions nicely coming off the assembly line around that time, and adding in the typical springtime weather boost, average monthly sales were to then have increased to 100 Corvettes per day, the days supply would drop to roughly 80 days.
Note: BGA is currently working 5 days per week, 8 hours per day, producing at an average daily production rates of 93 Corvettes/day.
While there are always extenuating and different circumstances, the auto industry’s desired average “days supply” is usually 60 days for each model, meaning that they have enough inventory in stock to show new customers, yet now too much inventory to cost them dearly with carrying charges.
Examples:
In December, 2018, there were 8,000 unsold Corvettes nationwide. The average December daily sales rate was 49.5 units per day, resulting in a 162 day supply at the December sales rate.
However, if this coming April, a month in which sports car sales typically weather-wise grow nicely, if the inventory then were to be the same sales 8,000 unsold Corvette units, but the average sales rate were to have grown to 75 Corvettes per day, the days supply would drop to 107.
And if, perhaps because the 2019 special editions nicely coming off the assembly line around that time, and adding in the typical springtime weather boost, average monthly sales were to then have increased to 100 Corvettes per day, the days supply would drop to roughly 80 days.
Note: BGA is currently working 5 days per week, 8 hours per day, producing at an average daily production rates of 93 Corvettes/day.
While there are always extenuating and different circumstances, the auto industry’s desired average “days supply” is usually 60 days for each model, meaning that they have enough inventory in stock to show new customers, yet now too much inventory to cost them dearly with carrying charges.
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