Lead time is calculated by taking the number of days between the order entry and receipt on the three most recent purchase orders, and dividing by three. If more than three purchase orders exist, all purchase orders within the period specified in the Order Analysis Interval field on the Inventory Management Preferences dialog will be used.

If there are multiple receipts for the item against the same purchase order, the calculation is made using the difference between the purchase order and the last receipt (the receipt that fully receives the order).

Lead time calculation is not weighted by number of units received.

More recent purchase orders without receipts are ignored.