Michael Gregory, logistics manager of Muscle Man Fitness Equipment, has determined that his current forecast system for national sales has historically shown a 20 percent error rate. Due to this level of error, Muscle Man’s DC managers maintain inventory at their locations costing the company, on average, $3,000 per month. By improving his forecast methodology and shortening forecast horizons, Mr. Gregory anticipates cutting the error level down to 12 percent. With improved forecasting, Muscle Man’s DC managers have indicated that they feel comfortable with lower inventory levels. Mr. Gregory anticipates monthly inventory carrying cost reductions of 40 percent. a. If the forecast system improvement will cost $1,000 more per month than the old system, should Mr. Gregory implement the change? b. Why might Muscle Man’s customers encourage the firm to improve its forecasting capabilities?