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Lead Time

January 3, 2023

The total time a customer must wait to receive a product after placing an order. Can be broken down into: order preparation, setup, run time, production and inspection. By breaking down lead time, managers can examine points in production where there are inefficiencies. For products that are made-to-order, the lead time is the time between the order and the shipment of the final product that fulfills the order. Whereas for make-to-stock product, lead time is the time between the order and when the product is received into the finished goods inventory.

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