What is vendor lead time forecasting? This is widely considered to be the time from when a Purchase Order is placed until the goods are ready and available to sell or ship off the shelf. Think about it this way:
- Replenishment: If you sell 1000 units a day and it takes 10 days from when you place an order until the goods are on the shelf to sell (or ship), then on the day you have 10,000 units remaining, you need to place an order or you will run out. (1000 units/day * 10 days = 10,000 units sold in 10 days)
- Fashion: If your line of products is suppose to be ready for your customers to buy on March 21, then you need to place the purchase order 10 days prior to March 21 or more if additional store set time will be needed after the goods arrive.