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Retail Supply Chain lesson
Weeks out of stock
Lead time is how long an order takes to arrive. Compare it with how long the stock on hand will last.
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Lead time is how long an order takes to arrive. Compare it with how long the stock on hand will last:
Formulas
Lead time − ( On hand ÷ Weekly sales )Key points
Lead timeHow many weeks an order takes to arrive, from placing it to having the stock.
Work it outWhen the lead time is longer than the stock will last, the difference is time out of stock.
Read it0 means new stock arrives in time. Anything above 0 is weeks of lost sales.
Check this every week: a gap you spot early can still be fixed.
Practice
1. If Canada orders today, how many weeks will it be out of stock?
Lead time 5 − weeks of supply 2 = 3 weeks2. In E2, work out the UK's weeks out of stock: lead time − on hand ÷ weekly sales.
=D2-B2/C23. Tap a market that will run out before new stock arrives.
Canada (3 weeks) and Australia (2 weeks) will both have empty shelves.4. How many sales could Canada lose in that gap?
3 weeks × 150 a week = 450 units5. How can Canada get back in stock sooner?
Transfer stock from a market with excess, like NigeriaLearn 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.
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