Which of the following is NOT a typical lead time component?

• A. Order processing time
• B. Supplier lead time
• C. Production time
• D. Forecasting time

Answer: (D)

Lead time is the clock from when an order is placed to when the item is delivered. Typical components that run this clock include the time to process the order in the system (order processing time), the time the supplier needs to confirm and ship the order (supplier lead time), and the time to actually manufacture or assemble the product (production time). Forecasting time, on the other hand, is an upfront planning activity used to predict demand and plan inventories. It doesn’t occur as part of fulfilling a specific order, so it doesn’t add to the order’s delivery clock. That’s why forecasting time is not a typical lead time component.