This measure determines raw material inventory days of supply, which is calculated as the value of raw materials inventory divided by the "value of transfers divided by 365 days." It is part of a set of Process Efficiency measures that help companies optimize the performance of their "produce product" process by minimizing waste and refining resource consumption.
365 / Raw material inventory turn rate
Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.