Production and Operation Criteria:

Several companies set either weekly or monthly output or schedule needs so as to give the largest positive cost variance, the greatest number of items shipped, or even the smallest possible lead time. The aforementioned criteria are largely self serving.

For instance, one can calculate the lead time right from the time the order is received to the time of shipment. But this kind of measurement might seem always acceptably low to manager while being unacceptably high to customers. The customer may prefer to measure lead time as follows.

Lead time = Time when customer receive the product - Time when customer places the order

The criteria adopted shall not necessarily satisfy customers.