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Can days of stock and Lead time be the same?
Can days of stock and Lead time be the same?
CustomerSuccess avatar
Written by CustomerSuccess
Updated over 2 years ago

Days of stock depend on the lead time. But they are not typically the same.

Days of stock = How many days of stock cover do you want to keep on hand? Which depends on many things, but one can primarily consider these three:
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1. Your supplier lead time
2. Frequency at which you want to re-order stock.
3. Buffer you want to keep to mitigate any supply chain contingency.


So you may think that if my lead time is 90 days, and I re-order every 90 days. Can I keep stock to cover the lead time?
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Yes, You can, but only if do not want to keep any buffer days for contingency.

How do you decide how many days of contingency to add?

The answer is, to look at your experience with your supplier and the external circumstances (holiday seasons, supply chain issues) and add a 10-20% contingency.

At 20% contingency, add 18 days to your lead time and reorder frequency, which is 90 days +18 days=108 days of stock.

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