Notification Lead Time in inventory optimization refers to the time interval between when a supply chain partner or system is informed of an upcoming demand or inventory need and when that demand actually materializes. It represents the advance notice given to suppliers, warehouses, or production teams so they can prepare, respond, and fulfill the requirement within the desired service level. Notification lead time can stem from sources such as sales forecasts, customer orders, or system-generated alerts based on inventory thresholds. The longer and more accurate the notification lead time, the better the supply chain can plan and act proactively. In practice, managing notification lead time is essential for reducing uncertainty and improving inventory efficiency. When notification lead times are too short or inaccurate, supply chains may experience stockouts, rushed orders, or excess inventory due to reactive planning. Conversely, reliable and sufficient notification lead times enable optimized procurement, production scheduling, and transportation planning. By incorporating notification lead time into inventory models, companies can better balance cost and service levels, ensuring timely replenishment and minimizing disruptions throughout the supply chain.
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