lead time demand

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The projected level of demand for a product from consumers during its lead time from the supplier to the retailer. Failure to adequately estimate the level of lead time demand for a given product can result in inventory shortages that cause customers to become dissatisfied waiting for backordered products. They may buy the product from a competitor instead, leading to lost revenue. Safety stock, if stored in sufficient quantitie, may be used as a buffer in the event that lead time demand is misjudged. Overestimating lead time demand can lead to inefficient use of storage space and is not consistent with lean supply chain management practices.


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