Question

Lead time uncertainty refers to which of the following?

a) the uncertainty surrounding new product development projects
b) the variability in lead times across multiple order cycles
c) the average amount of time that elapses between order placement and order receipt
d) the number of different transportation options (with different lead times) a firm considers

Answer 1

Lead time uncertainty is the variability in lead times across multiple order cycles, involving uncertainty in time measurements related to order placement and receipt.

Step-by-step explanation:

Lead time uncertainty refers to b) the variability in lead times across multiple order cycles. This concept involves a lack of precision or a lack of knowledge of precise results in measurements of time, relating to how long it will take for an order to be placed and then received. In a business context, managing this kind of uncertainty is crucial for maintaining efficient inventory levels and ensuring customer satisfaction.