Modeling Demand During Lead Time*

This paper treats some of the important considerations in constructing an analytical model for the distribution of demand during lead time. It presents a formal model that can be developed along one of two lines. The first has order size and order intensity leading to a compound distribution of period demand, then period demand and lead time giving rise to a compound distribution of demand during lead time. The second has order intensity and lead time giving rise to a compound distribution of lead‐time order intensity, then lead‐time order intensity and order size leading to a compound distribution of demand during lead time. The paper also condenses the state of the art in a table and proposes some simple classification schemes that could help researchers extend that state of the art.