Details Explain why given statements are true/false

1. If a company consolidates two warehouses into one and discovers that total safety stock levels do not fall as a result of the consolidation, the most likely reason is that lead time demands between the two warehouses were perfectly positively connected. (False)

2. If lead time demands between multiple warehouses are uncorrelated, warehouse centralization will never result in any risk sharing benefits. (True)

3. The cost of closing warehouses and the resulting effects on transportation lead times and prices must be balanced against the risk pooling benefits of warehouse centralization( False)

4. If lead time demands across multiple warehouses are uncorrelated, warehouse centralization will never result in any risk sharing benefits. (true) 5. When demand patterns are somewhat stable, private warehousing is a viable option. (true) 6. One disadvantage of direct shipping is that it can result in higher transportation costs. (true)