Question: A company is considering centralizing inventory from two locations to one location for Item X. At Location 1, Item X has an average demand of

A company is considering centralizing inventory from two locations to one location for Item X. At Location 1, Item X has an average demand of 15 units a day and a standard deviation of demand of 4 unit a day. At Location 2, Item X has an average demand of 35 units a day and a standard deviation of demand of 4.2 units a day. The correlation of demand of Item X between Location 1 and Location 2 is 0.50. Assume demand at both locations is approximately normal. If you centralize the item, what is the pooled standard deviation of demand? a) 50.4 b) 7.1 c) 5.8 d) 8.2

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