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A regional grocery chain is deciding whether to store packaged goods at each of its 16 stores or at a centralized warehouse. Weekly demand at
A regional grocery chain is deciding whether to store packaged goods at each of its 16 stores or at a centralized warehouse. Weekly demand at each store is N(400, 100). The safety stock is set to twice the standard deviation of average weekly demand to ensure about a 98% fill rate. How much inventory can be saved if they pool the safety stock and keep it at the warehouse instead of individual stores?
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