The stuff they teach in business school about managing inventory fails because it ignores how much corporate red tape slows things down.
March 26, 2026
Original Paper
Execution Latency in Inventory Control: Extending Reorder Point Logic to Organizational Reality
SSRN · 6197040
The Takeaway
Classical economic models treat 'lead time' as something the supplier controls (shipping/manufacturing). This paper shows that in many markets, the time it takes for managers to approve a purchase order is a more critical—and more ignored—variable than the actual delivery time.
From the abstract
Classical or Traditional inventory models such as Economic Reorder Quantity (EOQ) and Reorder Point (ROP) structures conjecture that replenishment actions are executed immediately once predefined thresholds or maybe a start point is reached. While this model is frequently used in all places but when seeing through mathematical sense or using a analytical thinking, this assumption frequently fails in practice, particularly in emergingmarket procurement environments where variables like hierarchic