There are several elements exerting an upstream or downstream influence on the
position of the CODP (Figure 9); in other words where to keep product inventory. It is a
balancing process between the delivery time requested by the customer, the throughput time in
purchasing, production and distribution and the expected customer service of an organization.
If the requested delivery lead time is very short, stock should be kept close to the market. On
the other hand, if the delivery lead time is relatively long, stock could be kept upstream in the
supply chain (towards the processors) taking advantage of centralized inventory management.
Other factors, such as whether the products are universal or specific, also play a role in this
trade-off process.