Factor 2
The two factors delay and inventory interact with each other in a system of positive amplification: that is, they go up together and they go down together. This interrelationship results in either a virtuous cycle, where things keep getting better, or a vicious cycle, where they keep getting worse. For example, extra delay in a process will result in extra inventory being held to compensate for the delay. Adding more inventory causes further delays as products take longer to flow through the process, which leads to the need for more inventory. Conversely, if delays are reduced then less inventory is needed, which results in fewer delays, meaning that inventory can be further reduced. Making sure this relationship operates as a virtuous cycle of reducing delay and inventory instead of a vicious one where they increase depends on the underpinning factors in level 3.