A Little Look Under the Hood - Average Daily Usage

At StockUp, we leverage advanced AI algorithms to optimize inventory management for small businesses. One of the key metrics we use is Average Daily Usage (ADU). Here’s a peek into how we calculate and utilize this crucial metric:

What is Average Daily Usage?

Average Daily Usage (ADU) is a measure of how much inventory is consumed, on average, every day. This metric is essential for predicting future inventory needs and optimizing stock levels.

How We Calculate ADU

We start by calculating inventory usage over a specific period:

Initial inventory + Inventory added - Final inventory = Inventory usage

Then, we divide this usage by the number of days in the period:

Inventory usage ÷ Number of days = Average Daily Usage

An Example

Let’s say a Shopify store selling widgets has the following data for a 30-day period:

Initial inventory: 100 widgets
Widgets added during the period: 50
Final inventory: 70 widgets
Inventory usage = (100 + 50) - 70 = 80 widgets

Average Daily Usage = 80 widgets ÷ 30 days = 2.67 widgets per day

How StockUp Uses ADU

StockUp’s AI engine uses this ADU data, along with other factors like seasonality and market trends, to:

1. Predict future inventory needs
2. Set optimal reorder points
3. Suggest ideal order quantities
4. Prevent stockouts and overstock situations

By automating these calculations and predictions, StockUp frees up valuable time for small business owners, allowing them to focus on growth rather than inventory management.

Remember, this is just one piece of the puzzle. StockUp’s comprehensive approach to inventory management goes beyond ADU to provide a complete solution for small businesses on Shopify and, in the future, WooCommerce platforms.