Which statement best defines lead time in supply chain management?

• A. Lead time is the time to complete a unit in production.
• B. Lead time is the total time from a customer placing an order to its delivery.
• C. Lead time is the time from shipment to delivery.
• D. Lead time is the time to restock inventory.

Answer: (B)

Lead time is the total duration from when a customer places an order to when that order arrives at the customer’s door. It covers every step in between, including order processing, any production or assembly, and the shipping or delivery to the customer. This holistic view makes it a key measure of how responsive a supply chain is to customer requests.

Thinking through the options, focusing only on production time misses how long the customer waited from order to delivery. Shipping time alone ignores the time spent processing the order and making or sourcing the product. Restocking inventory refers to replenishing stock for future orders, not fulfilling a specific customer order from start to finish.