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Note 2.3 External and Internal Lead Times
ОглавлениеAn implicit assumption often made in inventory theory is that there is no time elapsing between receiving an order from the supplier(s) and making that order available for customers. The reality, though, is different as there are many situations when that time difference not only exists but is quite significant too. Unloading goods upon receipt, incoming goods inspection, moving the received items to their allocated space (especially in large warehouses), and updating the information system to reflect the receipts, are not necessarily trivial exercises, time‐wise, and this should be taken into account when calculating lead times.
In summary, lead times consist of two time components: (i) external supply lead time (time difference between placing an order and receiving it); (ii) internal lead time (time difference between receiving an order and making it available for customers). However, the latter is usually ignored and the terms ‘lead time’ and ‘supply lead time’ are (wrongly) used interchangeably.