Identify managerial levers that reduce lot size and cycle inventory in a supply chain without increasing cost. The key managerial levers for reducing lot size, and thus cycle inventory, in the supply chain without increasing cost are the following:

• Reduce fixed ordering and transportation costs incurred per order.

• Implement volume-based discounting schemes rather than individual lot-size–based discounting schemes.

• Eliminate or reduce trade promotions and encourage EDLP. Base trade promotions on sell-through rather than sell-in to the retailer.