Trade · 6 pages · 12 min
How a lead time hides inside a price
A quoted unit price can omit the weeks of waiting, and that wait still costs money and sales.
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From the opening
A purchase order states a unit price and, separately, a lead time, the span from the order to the moment goods can be used or sold. The low number on the invoice hides cash sitting in transit, a shelf that stays empty, and work that cannot start until the shipment lands. The opening covers unit price omits the wait, forecast error rides the delay, and safety stock stores the lag.
The rest of the brief — the later sections and the reading notes — opens after Stripe confirms payment.
Inside
- Unit price omits the wait
- Forecast error rides the delay
- Safety stock stores the lag
- Late goods miss the window
- Where the idea stops applying
- A distinction worth keeping
Sources
- Procurement lead time
- Pipeline inventory carrying cost