This chapter provides an overview of historical lead-time calculations and discusses making calculations.

Historical lead is the average shipping lead time it takes to ship an item after entering an order. This value is only informational. You can use it to uncover potential shipping problems and to specify the item's projected order lead time. You calculate historical lead using shipments within a certain time frame, such as the last three months, and by specifying the calculation method.

To set up historical lead calculation methods, use the Setup Historic Lead Calc (HIST_LD_SETUP_INV) component.

This section discusses how to:

#### Pages Used to Make Historical Lead Calculations

To define historical lead time calculation parameters, use the Historical Lead Calc Setup (HIST_LD_SETUP_INV) component.

Access the Setup Historic Lead Calculation page (Inventory, Manage Inventory, Analyze Inventory, Setup Historic Lead Calc, Historic Lead Calculation).

Each shipment has a lead time that is equal to the number of days between the demand date and the shipment date. The demand date is the date the material stock request or sales order was sent to PeopleSoft Inventory to begin the fulfillment process; the ship date is the date the material stock request or sales order demand line was shipped.

 Calculation Time Frame Determines the period of time to include in the calculation. Average Calculates the historic lead time by summing the individual lead times and dividing the result by the number of shipments. Weighted Average Calculates the historic lead time by dividing the specified calculation time frame into the number of time periods. The lead time for shipments that fall within a more recent time period are weighted more heavily than those in an earlier time period. For example, if you specified three months as the time frame and three as the number of time periods, each time period is approximately one month. The lead time for shipments that fall in the earliest period have a weight of one, those that fall in the middle period have a weight of two, and those in the most recent period have a weight of three. The historical lead for the item is skewed toward the more recent shipments. Weighted average calculation can provide a more accurate picture of historical lead.