What is the industry standard number of days inventory for wood inventory for furniture shop?

Answer 1

I doubt that there is a "standard". One must consider several issues.
1. Your own particular volumn. This includes breaking down your assortment and number of pieces needed in those categories.
ie. Bedding, living area, kitchen, lamps,etc. Then converting that to dollars. The total tells you your total dollar inventory.

2. If you have calculated the "beginning" amount you need in each of those, or if you already have on hand any amount, then you have to consider delivery time for reorders.

3. As far as the number of days supply, lets consider a new store.
a: Assuming one has the necessary capitol, and/or credit, plan the expected sales volumn. Then plan the assortment, units and dollars. For each month. At least for six months. Longer plans after you have been around a year, and experience seasonal ups and downs..
b:On placement of orders, one will know an approximate store opening date, based on expected delivery. Bear in mind, furniture, in most cases, is slow delivery, with the exception of a limited numbers of "stock items".
c:Now! How much inventory does one need? The critical question.
With your planned sales, let's say, the first month. The best you can do is break down a month's sales by day. Then calculate the sales units by category, by day. These should have totaled equally in your original plan.
With this in mind, you must have some idea of delivery time for each item you carry. Knowing that, you can now perform estimates.
From your unit sales plan in each category, how many days would you plan to sell out?

You surely would not want to be completely out of inventory.
So how to prevent that.
You take the planned beginning inventory, plan the number days supply, based on sales, estimate the number of days for delivery, and planned inventory on hand at the end of that time.
First, lets assume that delivery time is about 30 days for everything you carry.

You must have a supply of inventory for 30 days to support 30 days sales. WAIT. You'll be out of stock! Theoretically.

Let's do some numbers. Based on 30 day sales.
Glossary:
BOM, Beginning of month
EOM, End of month
OTB, Open to buy
BOM, (plan inv.) .......................................50,000.00
Sales, (30 days plan)................................50,000.00
Del.( plan deliveries).................................._________
EOM, (ending inv.).....................................50,000.00
EOM is plan for next month sales.
You must have $50,000 BOM You want to have $50,000 EOM.
Can you see what must be done?

In order to have BOM, minus planned Sales, plus EOM, calculate planned deliveries.

Add the BOM, 50,000, plus EOM, 50,000, minus Sales, 50,000.

If you do this on paper, enter 50,000 in the delivery.
SO, you need $50,000 BOM inventory. Then you need to plan on 50,000 to be delivered during the month.
DO NOT FORGET! You always consider open orders not received. This reduces your OTB. All orders placed must be deducted from your planned deliveries.

Now, you cannot wait to have all the deliveries in one day EOM.
You must watch sales very closely from day one and adjust your plan accordingly as sales progress. Very quickly, you will find that you may not have planned accurately, and you, (and I) are not the geniuses we thought we were.

But, you have the rest of the month to make adjustments and corrections in inventory or sales, or both. This tis he necessity of "Flexible plans".

Make this plan for "no less than 6 months", 12 months better.

Never buy your total planned Deliveries at one time during any month, except original BOM. Buy as things change. At times you may have to commit more based on delivey time, always try to have 1/3-1/2 deliveries,, OTB, as the month passes.

I hope you have some idea of these and a good knowledge of your own. I do hope I haven't ommited too much. There is more.

The last thing I can stress, Keep a Unit Control. Dollars will take care ot themselves with that.

Answer 2

Generally 30-60.