Question: Only solve Q . 4 please!!!! 3 . Consider the example covered during Class session 3 on Risk Pooling Across Locations, and answer the following
Only solve Q please!!!!
Consider the example covered during Class session on Risk Pooling Across Locations, and answer the following questions:
a What is the average inventory of product B in NJ and MA
b Assuming that the demand for product B across the MA and NJ locations are independent. Now if we centralize the warehouses for product B what is the average inventory of product B at the centralized warehouse?
c How much inventory reduction we get by having a centralized warehouse for product B
For this question, assume that the demand for product B across the MA and NJ locations are negatively correlated with correlation coefficient of 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?
b How much inventory reduction we get by having a centralized warehouse for product B
c Compare your answer in Part bQuestion with your answer in part cQuestion and briefly explain the intuition for your results.
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