Does risk pooling favor a centralized or decentralized warehousing system? Why?
What will be an ideal response?
Risk pooling favors a centralized warehousing system.
Risk pooling, through the square root rule, illustrates the relationship between inventory, customer service levels, and the number of warehouses. By using the square root rule formula it can be seen that demand in different markets is negatively correlated. This means that high demand in one area will likely be offset by low demand in another area. Thus, having fewer warehouses offsets the need for a large pool of safety stock distributed amongst a large number of warehouses. In other words system variability can be better controlled from one centralized warehouse versus a large number of warehouses all of which would have to have their own pool of safety stocks in order to control demand variability within their region.
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Which of the following strategy tools suggests that an organization will do better in fast-growing markets in which it has a high market share rather than in slow-growing markets in which it has a low market share?
A. SWOT analysis B. Porter's model for industry analysis C. Porter's competitive strategies D. The BCG matrix E. Trend analysis
The statement of stockholders' equity is useful in evaluating a company's liquidity
a. True b. False Indicate whether the statement is true or false
Bella is in line for a promotion. Andy told Bella that she would get the promotion even though he knew that he was giving it to Ryan. Andy wanted Bella to think that he appreciated her, and therefore manipulated her into staying with the company. By telling her that the promotion was out of his control, he felt she would stay. Andy has displayed
a. High levels of Risk taking propensity b. High levels of Machiavellianism c. High levels of Type B orientation d. Low levels of Type C orientation
The "utilization factor" is defined as the
A) percent of time the system is idle. B) average percent of time the customers wait in line. C) average time the service system is open. D) percent of time that a single customer is in the system. E) None of the above