Role of Cycle Inventory in a Supply Chain Cycle inventory adds 5 days to the time a unit spends in the supply chain Lower cycle inventory is better because: Average flow time is lower Working capital requirements are lower Lower inventory holding costs ■( Cycle inventory is held to take advantage of economies of scale and reduce cost within a supply chain. We first identify supply chain costs that are influenced by lot size. SEIEE AU406 8+ - SEIEE AU406 Role of Cycle Inventory in a Supply Chain  Cycle inventory adds 5 days to the time a unit spends in the supply chain  Lower cycle inventory is better because:  Average flow time is lower  Working capital requirements are lower  Lower inventory holding costs  Cycle inventory is held to take advantage of economies of scale and reduce cost within a supply chain.  We first identify supply chain costs that are influenced by lot size. 8