Exploiting embedded supply-chain real options creates powerful opportunities for competitive manufacturing in high-cost environments. Rather than seeking competitiveness through standardization as is common to lean production, real-options reasoning explores opportunities to use supply-chain...

Exploiting embedded supply-chain real options creates powerful opportunities for competitive manufacturing in high-cost environments. Rather than seeking competitiveness through standardization as is common to lean production, real-options reasoning explores opportunities to use supply-chain...

Although it is generally agreed that companies are better off with shorter manufacturing lead times, investment in lead time reduction is often difficult to justify using traditional project valuation techniques such as net present value (NPV). In this article, we suggest that evaluating...

We develop a real-options model for optimizing production and sourcing choices under evolutionary supply-chain risk. We model lead time as an endogenous decision and calculate the cost differential required to compensate for the risk exposure coming from lead time. The shape of the resulting...

As the time between the decision about what to produce and the moment when demand is observed (the decision lead time) increases, the demand forecast becomes more uncertain. Uncertainty can increase gradually in decision lead time, or can increase as a dramatic change in median demand. Whether...

When do short lead times warrant a cost premium? Decision makers generally agree that short lead times enhance competitiveness, but have struggled to quantify their benefits. Blackburn (2012) argued that the marginal value of time is low when demand is predictable and salvage values are high. De...