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Scenario 9.1 Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer's average demand for Product
Scenario 9.1 Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer's average demand for Product A is 75 units per week. The lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350 units per shipment. Refer to Scenario 9.1. With the change in lead time, the pipeline inventory will:
decrease by 75 units. | ||
increase by 25 units. | ||
decrease by 25 units. | ||
increase by 50 units. |
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