Anna Litic, a new supply chain manager at High Precision Inc. (HP), decides to check some data on the supply chains she manages. She discovers that HP’s in-transit inventory of electronic components from its Tacoma, Washington, factory to its Asian distribution center (DC) has increased from two quarters ago. However, the distribution of demand at the Asian DC has not changed over this period of time. Anna knows that the Asian DC manager is controlling inventory to achieve a fixed in-stock probability target, so she is happy to see that indeed the in-stock inventory at the Asian DC has also not deviated off the target. Anna wonders what has happened to the Asian DC’s average inventory. What is she likely to discover regarding the Asian DC’s on-hand inventory? 

a. On-hand inventory has not changed because the in-stock probability has not changed at the Asian DC. 

b. On-hand inventory has increased because the lead time from Tacoma, Washington, to the Asian DC must have increased. 

c. On-hand inventory has not changed because average demand has not changed at the Asian DC. 

d. On-hand inventory has decreased because the variability of demand must have decreased. 

e. It is not possible to predict what Anna is likely to observe with respect to the change in on-hand inventory; that is, it could be lower, higher, or unchanged.