Beyond qualitative observations, the (Q, R) system offers some quantitative insight into the factors that affect the optimal stocking policy. (Example) Increasing the average annual demand tends to increase or decrease the optimal order quantity Q. Circle one: a. Increasing the average demand during a replenishment lead time t increases or decreases the optimal reorder point b. Increasing the variability of the demand process (i.e., o) tends to increase or decrease the optimal reorder point R. c. Increasing the holding cost tends to increase or decrease both the optimal replenishment quantity Q and reorder point R. d. Under conditions of random demand, higher customer service levels require higher or lower levels of safety stock. e. For a given replenishment frequency, if customer service remains fixed (at a sufficiently high level), then the higher or lower the variability (i.e., standard deviation of demand or replenishment lead time), the more inventory we must carry