The lead time cost

What lead time and its variability cost in inventory and flexibility.

The part

What it is

Long lead times require inventory; variable lead times require more inventory than long ones, because the buffer must cover the worst case.

Lead time also costs flexibility, which is real and hard to price — an organisation that must commit twelve weeks ahead cannot respond to anything.

The smallest level

The attributes it carries

Each attribute is one of the framework’s shared types. What a date is, and how it is written, is defined once for the whole model — the note here says what it means in this particular place.

Lead time
Quoted and actual.
Duration shared type
Variability
The spread, which is what sizes the safety stock.
Measure shared type
Inventory cost
What holding cover for this lead time costs.
Money shared type