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Patanjali has started selling through its online channel along with its retail stores. Management has to decide which product to carry at the retail stores
Patanjali has started selling through its online channel along with its retail stores. Management has to decide which product to carry at the retail stores and which product to carry at a central warehouse to be sold only via the online channel. The Patanjali currently has 5000 retail stores in the pan India. Weekly demand for Chaywanprash at each store is normally distributed, with a mean of 50 and a standard deviation of 10. Each unit of Chaywanprash costs Rs. 200. Patanjali has a holding cost of 10 percent. Patanjali manages all inventories using a continuous review policy, and the supply lead time for Chaywanprash is 3 weeks. The targeted CSL is 95 percent. How much reduction in holding cost per unit sold can the Patanjali expect on moving Chaywanprash from the stores to the online channel? Assume demand from one week to the next to be independent. [Note Fs-1 (0.95) =1.64] [7] Options
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