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Lead time refers to the amount of time it takes from placing an order with a supplier to receiving the merchandise in the store for sale. It is an important factor in the retail industry as it affects inventory management, customer satisfaction, and overall business performance.

A shorter lead time allows retailers to respond quickly to customer demands and market trends, minimizing the risk of stockouts and increasing sales.

It also helps in reducing inventory holding costs and improves cash flow by reducing the time between payment for goods and their availability for sale.