Lead time definition?

Lead time definition?

• A. The cost of procurement
• B. Period of time from date of ordering to date of delivery, including the time required for the supplier to manufacture or prepare the goods for shipment
• C. The time required for contract negotiations
• D. The time to arrange shipping

Answer: (B)

Lead time is the total period from placing an order to receiving the goods, including the supplier’s production or preparation time and the time to ship. This captures the full waiting period before you have the items in hand, which is why it’s the best definition for planning inventory and replenishment. The other options describe cost, contract negotiation time, or just the shipping arrangement—none of which cover the entire interval from order to delivery.

Lead time is the total period from placing an order to receiving the goods, including the supplier’s production or preparation time and the time to ship. This captures the full waiting period before you have the items in hand, which is why it’s the best definition for planning inventory and replenishment. The other options describe cost, contract negotiation time, or just the shipping arrangement—none of which cover the entire interval from order to delivery.