The actual nature of lead times in supply chains following a strict reorder point based approach

Abstract

The aim of this research is to demonstrate that supply chains by their very nature will experience stochastic rather than deterministic lead times. The presented study focuses on simulating delivery lead times in supply chains, where each echelon is servicing the next downstream member from inventory. The aim is to highlight the need for increased research focus on supply chains with stochastic lead times. Through a simple numerical example we conclusively show that lead times in any real supply chain following a re-order point method must be stochastic even in the case where lead times between individual echelons are in fact deterministic.