Question: 4 . For this question, assume that the demand for product B across the MA and NJ locations are negatively correlated with correlation coefficient of

4. For this question, assume that the demand for product B across the MA and NJ locations are negatively correlated with correlation coefficient of -0.5. And answer the following questions:
(a) If we centralize the warehouses for product B, what is the average inventory of product B at the centralized warehouse? (15 points)
(b) How much inventory reduction we get by having a centralized warehouse for product B?(5 points)
(c) Compare your answer in Part b-Question 4 with your answer in part c-Question 3 and briefly explain the intuition for your results.

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