Lead time is the time between placing an order and receiving stock.

Lead time is the time between placing an order and receiving stock.

• A. Minimum stock level
• B. Reorder level
• C. Lead time
• D. Just-in-time (JIT)

Answer: (C)

Lead time is the time span from placing an order with a supplier to receiving the stock. This matters because it helps a business plan when to order and how much safety stock to hold, since longer lead times increase the risk of stockouts during the wait. The description given matches this term exactly. The other concepts refer to different ideas: minimum stock level is the buffer kept to prevent shortages, reorder level is the point at which a new order is triggered, and just-in-time aims to minimize inventory by receiving goods right as they’re needed.

Lead time is the time span from placing an order with a supplier to receiving the stock. This matters because it helps a business plan when to order and how much safety stock to hold, since longer lead times increase the risk of stockouts during the wait. The description given matches this term exactly. The other concepts refer to different ideas: minimum stock level is the buffer kept to prevent shortages, reorder level is the point at which a new order is triggered, and just-in-time aims to minimize inventory by receiving goods right as they’re needed.