The drug costs $10 per unit. What is the annual holding cost of safety inventory across all
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The drug costs $10 per unit. What is the annual holding cost of safety inventory across all retail stores? If the drug were centralized in one location, what would the annual cost of holding safety inventory at the central location be? What would the annual increase in delivery charge be? Do you recommend centralization?
c. Does your answer to
(a) and
(b) change if the demand across stores has a correlation coefficient of 0.5?
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