Weeks of Supply - Computation logic in proposed orders

Created by Shyam Sayana, Modified on Tue, 14 Oct at 7:27 AM by Shyam Sayana

Definition

Weeks of Supply (WOS) represents the number of future weeks of demand that can be met using all available and committed supply at a specific product–location.

This includes on-hand inventory and in-transit orders scheduled to arrive before or during the planning horizon, but excludes future suggested orders (since they are not yet committed).

Computation Logic

To calculate WOS, the system follows these steps:

Start with On-hand Inventory
- Begin with the available on-hand inventory at the start of the planning horizon.
Add In-transit Supply
- Includes all confirmed in-transit quantities (purchase orders, shipments, or stock transfers) that are expected to arrive on or before the end of the planning horizon.
- Ignores in-transits with receipt dates beyond the horizon.
Form a Supply Pool
- Combine on-hand and qualified in-transit quantities to form the cumulative supply pool.
Subtract Demand Sequentially
- Period by period (usually week by week), subtract the forecasted demand from the supply pool until the pool is depleted.
Determine WOS
- The number of full periods (weeks) that can be satisfied before the supply pool reaches zero represents the Weeks of Supply (WOS).
- WOS is displayed as a whole number of periods.

Rules

Include in-transits only if their receipt date ≤ last horizon period.
Ignore in-transits beyond the horizon.
Exclude suggested orders, as they are only projected recommendations.
Always show WOS as a whole number (rounded down).

Example: Let's consider a Product at Location combination.

Product: A
Location: X
On-hand Inventory: 1,800 units
In-transit: 600 units (due in Week 2)
Weekly Demand: [400, 300, 500, 600, 700]

Computation:

Week	Description	Remaining Supply
Week 1	Start with 1,800(On hand) − 400 (demand)	1,400
Week 2	Add in-transit 600 to remaining supply from previous week(i.e. 1,400), then subtract demand 300 i.e. → Total remainng supply for Week 2= 1,400 + 600 - 300	1,700
Week 3	Week 2 remaining supply (1,700) minus Week 3 demand (500) i.e .1700 - 500	1,200
Week 4	Week 3 remaining supply (1,200) minus Week 4 demand (600) i.e. 1,200 - 500	600
Week 5	Week 4 remaining supply (600) minus Week 5 demand (700) i.e. 600-700 → supply exhausted	—

✅ Weeks of Supply = 4 weeks

Interpretation

A WOS value of 4 means that the available and in-transit supply can fully meet demand for four future weeks before a shortage occurs.