Lead time variability is the silent killer of inventory planning. Operators plan against the supplier\'s quoted lead time and get blindsided when actual delivery runs 30-50% longer. The cure is planning explicitly for the variance, not the average.
This calculator models three scenarios: best-case (quoted lead time), expected (quoted + half variance), and worst-case (quoted + full variance). For each, it calculates the inventory you\'d need to avoid stockout. The right safety stock sits between expected and worst-case based on your tolerance.
Supplier diversification reduces variance dramatically. A single supplier with 25% variability has 25% delay risk on any given shipment. Two suppliers each with 25% variability, ordering 60/40 split, has only 6% probability of both delaying simultaneously — effective variance drops to ~10-15%.
Pair with the Safety Stock and Reorder Point calculators. Most successful brands track actual lead time vs quoted across every order — within 6-12 months you have real data on supplier reliability that beats any benchmark.
Frequently asked questions
What's a typical supplier lead time?
China factory: 30-60 days production + 15-45 days ocean freight = 45-105 days total. Air freight cuts shipping to 5-10 days but costs 5-10× more. US/EU domestic: 14-28 days production + 3-7 days shipping. Print-on-demand: 3-7 days end-to-end.
What's lead time variability?
Most suppliers quote a "best case" lead time but actual delivery varies ±20-40%. A "60-day" lead time often becomes 50-80 days depending on factory load, port congestion, and customs. Plan for the upper end of variability.
How does delay risk affect inventory planning?
A 10% delay risk on a 60-day lead time means you should keep 6 extra days of safety stock as buffer. Higher delay risk → more safety stock → more cash tied up. Choose: pay for inventory buffer or accept stockout risk.
Should I diversify suppliers?
Yes — for any SKU doing $50K+ annual revenue. Single-supplier risk in 2026: factory shutdowns, trade disputes, freight bottlenecks. Splitting between 2 suppliers (60/40 typical) costs slightly more per unit but eliminates single-point-of-failure risk.
When should I switch to air freight?
When stockout risk × cost-of-stockout exceeds (air freight cost − ocean freight cost). For high-margin SKUs, air freight on emergency restock often pays back. For low-margin commodity SKUs, take the stockout — cheaper than premium shipping.