Demand and Lead Time

Lead-Time Demand

Demand during lead time is exact multiplication in this deterministic model.

highlighted = computed this step

Multiply

Demand during lead time is demand rate times lead time.

dLdL
Reorder-point chartThe chart recomputes the reorder point and inventory-position decisions.reorder point and positionR = 6 + 4 = 10inventory position checksnapshoton handon orderbackorderspositiondecisionexample day812020waitlater100010orderlead-time arithmeticdemand 6safety left 4start 10receipt +12after receipt 16deterministic demand and lead time only

Exact product

2 units per day for 3 days gives 6 units.

2×3=62\times3=6
Reorder-point chartThe chart recomputes the reorder point and inventory-position decisions.reorder point and positionR = 6 + 4 = 10inventory position checksnapshoton handon orderbackorderspositiondecisionexample day812020waitlater100010orderlead-time arithmeticdemand 6safety left 4start 10receipt +12after receipt 16deterministic demand and lead time only

Lead-time demand

The deterministic lead-time demand is 6 units.

lead-time demand=6\text{lead-time demand}=6
Reorder-point chartThe chart recomputes the reorder point and inventory-position decisions.reorder point and positionR = 6 + 4 = 10inventory position checksnapshoton handon orderbackorderspositiondecisionexample day812020waitlater100010orderlead-time arithmeticdemand 6safety left 4start 10receipt +12after receipt 16deterministic demand and lead time only