Question: A large distributor has 5 retail outlets. Currently each outlet manages its ordering independently. Demand at each retail outlet averages 2 0 0 0 per
A large distributor has retail outlets. Currently each outlet manages its ordering independently. Demand at each retail outlet averages per day. Assume there are days per year. Each unit of product costs dollars, and holding cost per unit of product per year is of the product cost. The fixed cost of each order administrative plus transportation is dollars in the decentralized system. The fixed cost of each order in the centralized system is twice of the decentralized system. Holding cost per unit are the same in the two systems.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
