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I agree with Ms.Bonnie Cheryl Nel
May be producing company has just-in-time production,when means that stocks are adjusted to flat demand,also their material stock is not enough to produce and they need immediate additional purchase of raw material and when on the market demand growth unexpectedly such supplier may face stock -out problem. Just-in -time production companies are not flexible and need time to generate enough stocks in such cases.
This depends on the stock level of the required items and whether they are available or not. If not, then this could be the time it takes to produce or acquire these components
Company "A" may have production on Just In Time basis, so production is pushed by orders placed, and normally the demand for the product can justify4 day lead-in time, or the components are available as standard stock from more suppliers in the town. Should company "B" have a Optimum Transfer Price from Company "A" then they would be aware time lags for delivery from date of order, and should plan accordingly.
Alternatively Company "B" could reschedule production for4-5 days postpone, until the component has arrived. This is assuming Company B manufactures varied products.
Maybe Beacuse Capacity for company A is100 components a day
The quantity of components ordered (400pcs) by company B, were not available in stock with company A.
Possibly set up time was three days. Ancillary units usually keep a buffer stock for such eventualities.
Agree with all ...................................
The company A was not able to meet the demand of company B because it is unplanned demand
Company A follow make to order system, and my be they have lead time for production and of course they need time for buying for row materials needed.
on the other side you need to have this lead time in your planning schedule and to have accurate safety stock to cover these un expected and deviation in your demand.
Best Regards
that company might be using JIT system (just in time ) which don't hold stock in spare but only produce once they get order and its maximum Capacity to produce product would be100 per day so they need4 days to fulfill requirement
