Question: Suppose a retailer currently orders a product from a distribution center in lots of 1400. The retailer's average demand for the product is 200 units

Suppose a retailer currently orders a product from a distribution center in lots of 1400. The retailer's average demand for the product is 200 units per week, and lead time from the distributor to the retailer is 5 weeks. The distributor has proposed that the retailer purchase quantities of 1000 per shipment instead; this will reduce the lead time down to 2 weeks.

By following the distributor's proposal, the retailer's pipeline inventory will _______

decrease by 1000 units

decrease by 600 units

decrease by 400 units

stay the same

increase by 400 units

increase by 600 units

increase by 1000 units

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