What Is Lead Time How Can It Affect Inventory Management?
Lead time refers to the period required to fulfil an order, from the time of placing the order to the delivery of the product. Lead time can significantly affect inventory management as inventory needs to be maintained to cover the lead time. Longer lead times often mean holding higher inventory levels, while shorter lead times may allow for just-in-time inventory management. Accurate forecasting and efficient inventory management are critical to minimizing the impact of lead time on inventory levels and ensuring that inventory is available when needed.