Multiple Choice
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. The net impact on the retailer will be:
A) no net change in average cycle and pipeline inventories.
B) a net average increase in cycle and pipeline inventories of 50 units.
C) a net average decrease in cycle and pipeline inventories of 75 units.
D) a net average decrease in cycle and pipeline inventories of 50 units.
Correct Answer:
Verified
Correct Answer:
Verified
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