Question: A company is considering changing its distribution strategy from push to pull, meaning instead of stocking up inventory at stores to fill consumers demand, it
A company is considering changing its distribution strategy from push to pull, meaning instead of stocking up inventory at stores to fill consumers demand, it uses stores mainly as showrooms. Its weekly average demand at each store is about units. Assume there is economies of scale in picking: the picking cost for the first pick is $ per unit and is $ per unit for followup picks. How would its weekly picking costs be affected when it changes from push to pull strategy?
Question options:
Its picking costs would increase by times
Its picking costs would keep the same
Its picking costs would decrease by times
None of the above
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