Supplier Lead Time

The time between placing an order with your supplier and receiving the goods, includes production, quality checks, and shipping.

Underestimating lead time is one of the most common causes of stockouts. If your supplier needs 8 weeks, you must reorder before you have 8 weeks of stock remaining.

Your supplier has a 6-week lead time. You sell 200 units/month. You must reorder when you have at least 300 units remaining (6 weeks × ~50 units/week) to avoid running out.