The time that will elapse before an item in stock runs out. The concept is essential for scheduling the reordering of a range of goods. The run-out time for a product i is defined as:
ri = li/di,
where ri is run-out time in weeks, li is units in stock, and di is demand in units per week.
The table above gives a number of examples.
current stock (units)
demand rate (units/week)
run-out time (weeks)
Run-out time. The run-out times of four products as calculated from current stock levels and demand rates
Subjects: Business and Management.