# Understanding Purchase Order Lead Time.

The term "purchase order lead time" refers to the amount of time that passes between the moment a buyer submits a purchase order to a seller and the moment the seller ships the requested goods or services. In a supply chain, lead time can have a major impact on a company's ability to meet customer demand. For example, if a company's suppliers have long lead times, the company may need to keep higher levels of inventory on hand to avoid stockouts.

#### What is lead time formula?

The lead time formula is a mathematical equation used to calculate the amount of time that is required to complete a task, from start to finish. The lead time formula is used in many industries, including manufacturing, project management, and supply chain management. The lead time formula is:

Lead time = (End date - Start date) + (Number of days of work)

Lead time can be affected by many factors, including the complexity of the task, the number of people working on the task, and the availability of resources.

What are the 5 elements of manufacturing lead time? 1. The time it takes to receive an order from a customer
2. The time it takes to process the order and create a manufacturing plan
3. The time it takes to procure the necessary materials
4. The time it takes to manufacture the product
5. The time it takes to ship the product to the customer