Question

When should you place a planned order for an additional 50,000 basic jeans for the Columbus Day sales (October 14).

Calculate the Vendor's Lead Time Variance from the table below.

NRF 4-5-4 Calendar

                           Vendor’s Shipping History

Period	Planned Receipt Date	Actual Recept Date	Variance in Days
1	10-Jan	21-Jan
2	20-Feb	25-Feb
3	20-Mar	1-Apr
4	10-Apr	30-Apr
5	10-May	10-May
6	10-Jun	5-Jun
7	10-Jul	5-Jul
8	30-Jul	8-Aug
9	20-Aug	20-Aug
10	15-Sep	12-Sep
11	10-Oct	12-Oct
12	10-Nov	15-Nov
13	10-Dec	5-Dec

Vendor’s Lead Time Forecast 30 Days

Vendor’s Lead Time Variance in Days _____ Days

Vendor’s LTV as a %                   

Lead Time Range From _______to ________

To ensure on-time delivery, place order ______________

The earliest date to expect receipt ______________

Order Date

Earliest Arrival date

Start Date

Answer 1

The Lead Time forecast is given as 30 days, however the experience has been that the actual lead time is higher by a few days. This can be calculated for each instance from the table provided.

Period	Planned Receipt Date	Actual Receipt Date	Variance	Percentage Variance
1	10-Jan	21-Jan	11	37%
2	20-Feb	25-Feb	5	17%
3	20-Mar	01-Apr	12	40%
4	10-Apr	30-Apr	20	67%
5	10-May	10-May	0	0%
6	10-Jun	05-Jun	-5	-17%
7	10-Jul	05-Jul	-5	-17%
8	30-Jul	08-Aug	9	30%
9	20-Aug	20-Aug	0	0%
10	15-Sep	12-Sep	-3	-10%
11	10-Oct	12-Oct	2	7%
12	10-Nov	15-Nov	5	17%
13	10-Dec	05-Dec	-5	-17%
		Mean	3.5
		Std Dev	7.4

The Mean variance is a delay of 3.5 days

The percentage variance ranges from -17% to +67% of the lead time

We can see that the maximum lead time variance was a 20 day delay in period 4. Hence we should order with a lead time of 30+20 = 50 days i.e. the order to be placed on 25th Aug. In such a case the earliest possible delivery may happen with a variance of -5 days, i.e. with lead time of 25 days. Hence it could be expected on 19th Sept itself.