Which is NOT a component of lead time?

Which is NOT a component of lead time?

• A. Order processing
• B. Transit time
• C. Supplier lead time
• D. Safety stock level

Answer: (D)

Lead time is the total time from placing an order to receiving the goods. It consists of the time spent processing the order internally, the supplier’s lead time to prepare and ship, and the time the shipment spends in transit. Order processing covers the internal steps to confirm and document the order, pick the items, and generate any necessary paperwork. Supplier lead time is the period from placing the order to when the supplier ships it. Transit time is the actual movement of the goods from the supplier to you. Safety stock level, however, is a quantity kept on hand to guard against variability in demand or lead time; it does not represent a duration in the order-to-delivery process. Therefore, it is not a component of lead time.

Lead time is the total time from placing an order to receiving the goods. It consists of the time spent processing the order internally, the supplier’s lead time to prepare and ship, and the time the shipment spends in transit. Order processing covers the internal steps to confirm and document the order, pick the items, and generate any necessary paperwork. Supplier lead time is the period from placing the order to when the supplier ships it. Transit time is the actual movement of the goods from the supplier to you. Safety stock level, however, is a quantity kept on hand to guard against variability in demand or lead time; it does not represent a duration in the order-to-delivery process. Therefore, it is not a component of lead time.