Customer-Order Information, Leadtimes, and Inventories

We have an inventory to manage. The scenario is standard in all respects save one. Instead of arriving unannounced, customers provide advance warning of their demands. How should we use this information, and what is its effect on system performance? The answers turn out to be strikingly simple. There are very simple policies which perform effectively, in some cases optimally. Also such “demand leadtimes” improve performance, in precisely the same way that replenishment leadtimes degrade it.