Suppose the inventory manager changes the inventory managemen- tpolicy and now follows a “fixed-time period model”. What is theeffect of increased lead time, decreased variability and increasedordering costs on the target inventory level? Again, write youranswer in the table below by saying ei- ther Decreases (D),Increases (I), Stays the same (S), or, No answer – Insufficientinformation (NA). Fill in the blanks and fully justify youranswers.
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Target Inventory Level |
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Decreased variability |
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Increased lead time |
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Increased ordering/setup cost |
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Decreased service level |
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