Your company has figured out a way to reduce its inventory inventory (raw materials) by 50 percent without affecting quality or the production schedule. Your supplier is reliable so no delivery issues are expected. Your contract calls for you to pay the same price as you did when placing larger orders. Describe all the impacts of this reduction; including, but not limited to, financial impacts.
You are reducing the amount of raw material inventory you hold at a time, NOT the amount of raw material inventory used.