The Supply Duration is the number of months of sale covered by the current stock in a situation where the offline could not restock.
Duration of supply = Sales volume stock end of month / average monthly sales over 12 months
Case of products in launch
If your product is in launch and it has sales for less than 12 months, then in the calculation of the duration of supply, the average sales relate only to the months on which your product is sold. For a product with sales over 6 months, the average sales over these 6 months are taken into account.
This indicator should, however, be taken with caution in the case of launches, because the sales of a launch start low and increase rapidly, which means that the average sales volumes are biased especially when the number of months of sales is low.
For product A, a supply period of 3 means that pharmacists have enough stock on average to cope with sales over the next 3 months.
The duration of supply makes it possible to monitor the state of stocks and to highlight the risks of shortages. Also, it helps to draw attention to possible over-stocking strategies of competitors.
The duration of supply can be translated in English by stock coverage.
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