Documentation
SkuBrain 101
Supplier lead times
Next, to make things a bit more realistic, let’s say that we can’t get stock instantaneously for this product. Rather, it will take 1 month from when we place an order until products are available to customers (so lead time = 1 month).
Also assume we have stock_on_hand = 5 and the same forecast as before:
| # | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Total |
|---|---|---|---|---|---|---|---|
| Forecasted sales (units) | 4 | 5 | 7 | 3 | 4 | 6 | 29 |
In this case, by the time our new stock arrives we will only have one unit left in stock.
left_over = Max(0, stock_on_hand - lead_time_demand)
= 5 units - 4 units
= 1 units
And the amount of stock that we should reorder thus becomes:
Requirement = forecasted_demand_from_delivery - left_over
= 29 units - 4 units - 1 units
= 24 units
So far so good. Now let’s take a look at order frequency.