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Q24. Philadelphia Scientific is attempting to pilot a location pooling experiment among its sales personnel. They are exploring pooling 2 of the 3 sales regions:

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Q24. Philadelphia Scientific is attempting to pilot a location pooling experiment among its sales personnel. They are exploring pooling 2 of the 3 sales regions: A, B and C. All regions have the same demand distributions (mean and standard deviation), and are located equidistant from each other. An analyst finds that the historical demand between A and B is positively correlated. In contrast, demand for region C is negatively correlated With correlation factor -0.5 with Region A, and -0.5 with Region B. Also assume that location pooling does not significantly change the shipping distances from the warehouse to the regions, or the lead-time to the hospitals. Which of the two regions should Philadelphia pick to pilot their location pooling strategy? a. Definitely A and B only. b. Definitely B and C only. c. Definitely A and C only. d. Pool A and C, or pool B and C. e. Pool A and B, or pool B and C. f. Pool A and B, or pool A and C. g. All pairs are equally good candidates for pooling

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