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Lead time calculator

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Lead time is the number of days from placing an order to having the stock ready to sell. Add up the stages, or measure it from your last orders.

Add up the stages

Plan with a lead time of 51 days

The supplier’s production time is 20 of them. A quote of “20 days” leaves out the rest.

Typical sailing from China: 12–18 days to the West Coast, 25–38 days to the East Coast, port to port.

Measure it from your last orders

For each recent order, enter the day you placed it and the day the stock was ready to sell.

OrderOrderedReady to sellLead time
138 days
244 days
338 days
443 days
Average lead time 41 daysLongest was 44 days, 3 more than average. Plan with 41 days and hold safety stock for the extra 3.Lead times can stretch before Black Friday and Cyber Monday. Compare with the same orders last year.

What is lead time?

Lead time is the number of days from placing a purchase order to having that stock ready to sell. It is the waiting period your current stock has to cover, so it drives when you reorder. See the full definition in the lead time glossary entry.

The lead time formula

Lead time = date stock is ready to sell − date the order was placed

When you have no order history with a supplier yet, add up the stages instead:

Lead time = production + freight + customs + receiving

Worked example

A supplier quotes 20 days. Measuring four recent orders from order date to ready-to-sell date gives 38, 44, 38 and 43 days.

  • Average lead time: (38 + 44 + 38 + 43) ÷ 4 = 40.75, so plan with 41 days
  • Longest: 44 days, 3 days more than the average

The quote covered production only. Planning with 20 days would place every reorder about three weeks late. Plan with 41 days, and hold enough safety stock to cover 3 extra days of sales.

Why the quoted lead time is usually too short

  1. It often stops at the factory gate. Freight, customs and your own receiving can add weeks.
  2. It is a promise, not a record. Your last few orders show what actually happens, including holidays and busy seasons.
  3. It changes through the year. Factory closures around Chinese New Year and peak-season freight both stretch lead times. Measure orders from the same season last year when you plan for it.

Using lead time to decide when to reorder

Lead time feeds the reorder point: multiply average daily sales by lead time, then add safety stock. The reorder point calculator does the arithmetic.

A reorder planning tool goes one step further. It measures the lead time of each supplier from every order you receive, then moves each SKU’s reorder date when a supplier speeds up or slows down.

Frequently asked questions

How do you calculate lead time?

Lead time = the date the stock is ready to sell − the date you placed the order. Measure it on your last few orders and average them, or add up the stages (production, freight, customs and receiving) when you have no history yet.

Does lead time include shipping?

For inventory planning, yes. Lead time runs from placing the order until the stock can be sold, so it includes production, freight, customs and receiving. A supplier's quoted lead time often covers production only.

What does ARO mean in lead time?

ARO means "after receipt of order". A quote of "30 days ARO" means the supplier needs 30 days from receiving your order, usually to finish production. Freight and customs come on top.

Should I plan with the average or the longest lead time?

Plan with the average, and cover the difference between the average and the slow orders with safety stock. Planning every order with the longest lead time ties up more cash in stock than you need.