Lessons › Retail Supply Chain › Put it together
Retail Supply Chain lesson
Lead time gap
Suppliers promise a lead time. Compare it with how long deliveries really take.
Try this lesson free →The idea
Suppliers promise a lead time. Compare it with how long deliveries really take:
Formulas
Actual − PromisedKey points
Lead time gapHow much longer deliveries really take than promised.
Work it outTake the promised lead time away from the actual lead time.
Use itPlan with the actual lead time, and hold extra stock to cover the gap.
An unreliable supplier quietly breaks every reorder point that depends on them.
Practice
1. How many weeks late is Delta Power, on average?
4.2 − 3 = 1.2 weeks2. In D5, work out Nordic Mounts' lead time gap: actual − promised.
=C5-B53. Tap the supplier with the biggest lead time gap.
Nordic Mounts takes 1.5 weeks longer than promised.4. Delta Power's product sells 250 a week. The plan used a 3-week lead time, but it really takes 4.2. How much extra stock covers the difference?
(4.2 − 3) × 250 = 300 unitsLearn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.
Try this lesson free →