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Imagine there are two companies, Company 1 and Company 2. Both firms are wholesalers that sell full pallet quantities (i.e., customers must place orders that
Imagine there are two companies, Company 1 and Company 2. Both firms are wholesalers that sell full pallet quantities (i.e., customers must place orders that are 1 or more pallets, with no split pallets). Both firms have the same aggregate level of demand. The primary difference between these firms is that Company 1 tends to see a smaller number of larger orders (e.g., orders tend to range from 5-8 pallets), whereas Company 2 has a larger number of small orders (e.g., orders tend to range from 1-3 pallets). Each firm can fit 28 pallets on a full truckload shipment. Each firm wants to practice transportation consolidation. Given this information, which firm is likely to benefit more from transportation consolidation? Question 4 options: a) Company 1. b) Company 2. c) Both companies will equally achieve this target because they have the same average aggregate demand
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