What is Lead Time?
Lead time is the number of days between placing an order with a supplier and receiving the goods.
Updated
Meaning
English
Lead time is the number of days between placing an order with a supplier and receiving the goods.
Roman Urdu
Lead time order dene se maal milne tak ke dinon ko kehte hain.
Also called delivery time, supply time.
Example
A shop orders shampoo on Monday and the supplier delivers on Saturday. The lead time is five days.
Why it matters
Lead time decides when to reorder. If an item sells 8 a day and lead time is 5 days, you need 40 in hand when you order, or you will run out. Lead time varies by supplier and season, so record the real dates from past purchases instead of the promised ones. See safety stock.
In Nafaa
Nafaa stores purchase dates and shows low-stock items with what to order, so you can reorder before the shelf is empty. See purchasing.
Related terms
- Safety Stock
Safety stock is the extra quantity of an item kept in hand so the shop does not run out if sales are higher than expected or a delivery is late.
- Reorder Level
A reorder level is the stock quantity at which a new order should be placed, so stock arrives before the shelf runs empty.
- Purchase Order (PO)
A purchase order is a document a buyer sends a supplier listing the items, quantities and agreed prices it wants to buy.
- Supply Chain
A supply chain is the series of steps and businesses that move a product from the maker, through wholesalers and shops, to the final customer.