A firm serves the UK and France through one central warehouse plus local packaging sites. Demand in both countries is fairly predictable, but the firm is worried mainly about disruptions such as transport failures to one country or shutdowns at a local packaging site. According to the lecture, which inventory policy is most appropriate?

Question

Accepted Answer

Hold more inventory downstream in the local markets, because this improves protection against disruption even though pooling benefits are reduced

Answer

Eliminate inventory entirely, because inventory only mitigates recurrent demand risk

Answer

Hold all inventory at the central warehouse, because pooling is always best

Answer

Move all inventory upstream to suppliers, because local inventory cannot help if a packaging site is disrupted

Crowdly

A firm serves the UK and France through one central warehouse plus local packagi...

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