Question

21. In the chart below, both suppliers have the same average lead time. If you want equivalent service levels against the planned lead time in your planning system for these suppliers, which of the following describes the lead time input to the planning system for these suppliers: a. Lead times for both suppliers should be the same b. Lead time for supplier 1 needs to be greater than lead time for supplier 2 c. Lead time for supplier 2 needs to be greater than lead time for supplier 1

Answer 1

a. Lead time for both suppliers should be the same

Step-by-step explanation:

Lead time is the time required from order to delivery of good. The supplier 1 has less variability as compared to supplier 2 but the average lead time for both supplier will be the same. The supplier 1 has higher delivery time but no of days are lesser. The supplier 2 has higher number of days but less delivery time than supplier 1. The average lead time will be same for both the suppliers.