How Do I Calculate Months-on-Hand for Inventory?
Quick Answer: Months-on-hand (MOH) is calculated by dividing your current inventory quantity by your average monthly sales rate. An MOH of 3.0 means you have 3 months of stock on hand at the current rate of sale. Most consumer brands target 1–4 months depending on lead times and product category.
Months-on-hand (MOH) is a coverage metric that expresses how long your current inventory will last at the current rate of sale. It is one of the most commonly used inventory health indicators because it normalizes stock levels across products with very different sales velocities.
A product with 500 units on hand means nothing without context. An MOH of 1.5 (six weeks of coverage) or 12.0 (a full year of stock) tells you immediately whether you are at risk of stocking out or sitting on excess inventory.
The Months-on-Hand Formula
Months-on-Hand = Current Inventory Quantity ÷ Average Monthly Sales
Example:
Current inventory: 600 units
Average monthly sales: 200 units
MOH = 600 ÷ 200 = 3.0 months
You can also calculate weeks-on-hand for a more granular view:
Weeks-on-Hand = Current Inventory Quantity ÷ Average Weekly Sales
What MOH Thresholds Mean
< 1.0 month
Critical — stockout risk imminent
Place emergency reorder immediately
1.0–2.0 months
Low — within safety stock range
Review lead times and place reorder
2.0–4.0 months
Healthy — typical target range
Monitor; reorder per plan
4.0–6.0 months
Elevated — approaching overstock
Review forecast accuracy; defer orders
> 6.0 months
Excess inventory
Investigate; consider promotions or markdown
MOH thresholds vary by product type and lead time. A 4-month MOH is healthy for a product with a 90-day supplier lead time but excessive for a product that ships in 2 weeks.
Adjusting MOH for Lead Times
Raw MOH doesn't account for how long it takes to receive new inventory. A more useful version adjusts for reorder lead time:
Adjusted MOH Target = Safety Stock (months) + Supplier Lead Time (months)
Example: If your safety stock target is 0.5 months and your lead time is 2 months, you should reorder when MOH drops below 2.5 months.
MOH vs. Weeks of Supply vs. Days of Inventory
These three metrics are equivalent — just expressed in different time units:
Months-on-hand — Most common in consumer goods and wholesale
Weeks of supply (WOS) — Common in retail and fashion
Days of inventory outstanding (DIO) — Common in finance and supply chain analytics
To convert: MOH × 4.3 = WOS; MOH × 30 = days of inventory
How Moselle Uses MOH
Moselle calculates months-on-hand for every SKU in your catalog and surfaces it in your inventory reports and replenishment plans. Items falling below your defined coverage threshold are flagged as at-risk. Items above your maximum coverage target are flagged as excess.
You can set per-SKU or per-category MOH targets, and Moselle uses those targets alongside your demand forecast to calculate recommended order quantities.
Inventory ReportsAdd Your ConstraintsFrequently Asked Questions
Should MOH be calculated on total inventory or sellable inventory?
Answer: Sellable inventory. Damaged, quarantined, or reserved stock should be excluded from MOH calculations since it's not available to fulfill orders.
How does MOH differ from sell-through rate?
Answer: MOH measures how long current stock will last. Sell-through rate measures what percentage of inventory was sold in a given period. MOH is forward-looking coverage; sell-through is a backward-looking efficiency metric.
What MOH should I target for seasonal products?
Answer: For seasonal products, target MOH relative to the selling season rather than an annual average. Entering peak season with 2–3 months of coverage within that season is typical. Entering off-season with high MOH is a sign of overbuying.
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