Answer is A. To improve customer service (short cycle times, more product variety) inventory levels need to increase and transportation speed needs to improve - resulting in increased logistics costs.

With logistics, the cycle time is significant and can be complex. In logistics, cycle time runs fromthevendor shipping to you right through to your delivering the customer's order to him. This view ofcycletime means there are both internal and external factors. These must be recognized and dealt withan orderto manage and reduce the time. And the scope and complexity becomes significant if the vendoris locatedoverseas and/or the customer order is for export. Very often company management does notunderstandthe process and what all is involved to get materials into the manufacturing facility, or finishedgoods intoa warehouse and to deliver orders--all within the time constraints to meet the customer'srequirements. Agreed