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Consider the following data pertaining to the three warehouses operated by a company: Warehouse # Std . deviation of lead time demand 1 4 4
Consider the following data pertaining to the three warehouses operated by a company:
Warehouse # Std deviation of lead time demand
The company considers consolidating any two of its warehouses ie risk pooling Based on the information provided above and given that lead time demands between any two warehouses are correlated at ierho rho rho In which case will the reduction in safety stocks resulting from warehouse centralization likely be the greatest if we want to achieve service level? Does it make sense to conduct risk pooling in this scenario? Why? Please provide detailed calculation processes and you dont need to calculate percentage changes.
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