Impact of risk pooling on various inventory management

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Reference no: EM131759164

A distributor wants to see the impact of risk pooling on various inventory management parameters. The distributor currently has 5 warehouses each facing normally distributed independent and identical demand for a product. Each of 5 warehouses currently orders 684 units of products together whenever an order is placed based on a continuous review policy. What would be the new order quantity if demand at 5 warehouses consolidated into a single warehouse?

Reference no: EM131759164

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