Lead Time Calculator
Lead time is the total number of days from placing an order to receiving the goods. This calculator adds up every step (processing, manufacturing, shipping, and buffer) and then calculates your inventory reorder point so you never run out of stock.
The formulas are:
- Total Lead Time = Order Processing + Manufacturing + Shipping + Buffer
- Reorder Point = (Daily Demand x Lead Time) + Safety Stock
Typical Lead Times by Source
| Source | Typical Lead Time |
|---|---|
| Domestic manufacturer | 5-15 days |
| Overseas (China, etc.) | 30-90 days |
| Local distributor | 1-5 days |
| Drop shipping | 3-14 days |
| Custom/made-to-order | 14-60 days |
Why Lead Time Matters
Understanding your lead time is critical for:
- Inventory management: Know when to reorder before you run out
- Customer expectations: Set accurate delivery timelines
- Cash flow: Plan when payments will be due versus when revenue comes in
- Production planning: Schedule work based on when materials will arrive
For example, if your lead time is 19 days, you sell 50 units/day, and you keep 100 units of safety stock, your reorder point is 1,050 units. When your inventory drops to that level, it's time to place a new order.