Question: Risk Pooling involves using centralized inventory instead of decentralized inventory to take advantage of the fact that if demand is higher than average at
Risk Pooling involves using centralized inventory instead of decentralized inventory to take advantage of the fact that if demand is higher than average at some retailers, it is likely to be lower than average at others. Time 1 2 3 4 Region 1 Region 2 37 42 48 30 Total 85 72 458 45 28 35 49 80 77 5525 6 7 8 65 32 18 58 22 67 52 32 87 99 70 90 Consider that you are a Supply Chain Analyst for a leading retailer. You want to decide if you're going to centralize the inventories or want to keep two separate distribution centers for regions. Utilize the information above and support your decision using the at least three aspects (Average, CoV, EOQ, Safety Stock, Reorder Point) of the Risk Pooling concept. *Hint - There is no need to show the intermediate calculations; Provide the final calculations to support your decision.
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