Average Daily Demand

How to calculate average daily demand

Average Daily Demand = units shipped out over the window ÷ days in the window

Average daily demand example

Illustrative numbers: a warehouse shipped 630 units of a SKU over the last 90 days. Average daily demand = 630 ÷ 90 = 7 units per day. If you instead divided by only the 60 days the item was in stock, you would get 10.5 units per day, which is the better estimate of true demand when stockouts suppressed sales.

Why average daily demand matters for distributors

Distributors usually carry thousands of SKUs, so nobody can eyeball demand item by item. A consistent, data-driven daily rate lets you rank which SKUs are about to run short and how much to order, without a planner re-deriving it in a spreadsheet each week.

Common average daily demand mistakes

• Counting only sales and ignoring transfers out to other warehouses, which also empty this shelf.
• Treating a SKU with no movement as demand of zero and moving on. No recent demand is its own problem: possible obsolete stock.
• Using a window so short that one large order dominates it, or so long that it misses a real trend.

Average daily demand in Supply Chain Manager

Supply Chain Manager calculates it per SKU per warehouse from the trailing 90 days of sales plus transfers out, divided by 90. With no movement in that window it shows no demand, never a made-up figure.