National Council of Examiners for Engineering and Surveying (NCEES) Fundamentals of Engineering (FE) Industrial and Systems Practice Exam

Lead time in supply chain management refers to the total time required from placing an order to receiving the product. This includes all the steps taken during the ordering process, such as order processing, production time (if applicable), handling, logistics, and transportation to finally have the product delivered to the customer. Understanding lead time is critical for effective inventory management, production planning, and customer satisfaction, as it directly impacts the flow of materials and the timeliness of deliveries.

In contrast, the other choices specify narrower aspects of the overall lead time process. Product development and testing focus solely on the design phase before a product is even ordered, transportation and logistics only reference part of the journey concerning the product after it's manufactured, and the interval between production initiation and completion does not account for the order and delivery processes that are integral parts of lead time.