Chapter 3: Problem 11

How do planned lead times differ from actual lead times? Which is typically bigger, the planned lead time or the average actual lead time? Why?

Short Answer

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#Answer# Planned lead time is the estimated time a company schedules for completing a task or process, based on factors like previous experiences and resource availability. Actual lead time is the actual duration it takes to complete the task or process. Typically, actual lead times tend to be larger than planned lead times due to unforeseen circumstances such as unexpected delays, production issues, and changes in demand or capacity.

Step by step solution

Define Planned Lead Time

Planned lead time is the amount of time that a company schedules for the completion of a task or a process, which includes activities such as procurement, production, and delivery. This estimation is based on various factors, like previous experiences, process efficiency, and resource availability.

Define Actual Lead Time

Actual lead time is the actual amount of time that it takes for a task or process to be completed from start to finish. This can vary from the planned lead time due to several factors such as unexpected delays, changes in demand, supplier issues, or production problems.

Comparison of Planned and Actual Lead Times

The main difference between planned and actual lead times lies in their nature. Planned lead time is an estimation made by the company, while actual lead time is the true duration it takes to complete the process.

Analyzing Which Lead Time is Typically Bigger

Typically, actual lead times tend to be larger than planned lead times due to unforeseen circumstances, such as unexpected delays, production issues, and changes in demand or capacity. Additionally, companies may underestimate the time needed to complete the task or process, leading to an optimistic planned lead time.

Reasons for Variation in Lead Times

Several factors can contribute to variations between planned and actual lead times, such as: 1) Supply chain disruptions: Issues with suppliers or transportation can cause delays in procurement or delivery. 2) Production problems: Technical issues, equipment malfunctions, or labor shortages might affect the production process. 3) Changes in demand: Fluctuations in customer orders may impact production scheduling and lead times. 4) Inaccurate estimations: Companies may underestimate the time needed to complete tasks or processes in their planning. By understanding and addressing these factors, companies can work towards improving their lead time accuracy and overall efficiency.

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How do planned lead times differ from actual lead times? Which is typically bigger, the planned lead time or the average actual lead time? Why?

Short Answer

Step by step solution

Define Planned Lead Time

Define Actual Lead Time

Comparison of Planned and Actual Lead Times

Analyzing Which Lead Time is Typically Bigger

Reasons for Variation in Lead Times

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