Delivery Time
Overview
Delivery Time is defined as the amount of time between when a customer places an order for a product and when that customer receives the
product. It is one of the dimensions of product value provided to the customer that companies try to optimize.
Delivery Time Factors
The following factors are factors that influence the average delivery time.
- Stocked Inventory
- whether the inventory is stocked with the ordered product affects the delivery time. Keeping the inventory stocked
represents a trade-off for companies, because they have to produce product before it has been purchased. If they overproduce,
they can be stuck with inventory that is not moving, and eventually becomes obsolete.
- Inventory Location
- the location of the inventory can reduce delivery time if the location is near to the customer. One way to achieve this
is to locate the warehouses nearest to the greatest concentration of customers, or to locate multiple warehouses near
customer centers.
- Production Timeline
- if the product ordered is not currently in stock, the length of time it takes a company to produce or procure the
product will impact delivery time.
