The average number of days it takes a company to sell its inventory. It measures how efficiently inventory is managed and how quickly products move from warehouse to customer.
Combines English 'days,' 'inventory' from Medieval Latin 'inventarium' (list of goods), and 'outstanding.' This metric evolved alongside modern inventory management practices in the early-to-mid 20th century.
DIO varies wildly by industry - a grocery store might have 7 days while an aircraft manufacturer might have 300+ days, and both could be perfectly healthy! The key is understanding your industry's rhythm and seasonal patterns.
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