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-July 17, 2009 |
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By SCDigest Editorial Staff |
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This week's supply chain trivia question: With all other things being equal (and they never are), but nonetheless, in a single-tier distribution network, how many distribution centers does it take for the total inventory level in the network to double, versus having just a single DC, according to classic inventory management theory?
ANSWER:
4 - the formula, actually, is Inventory in All DCs = Inventory in One DC, divided by the square root of the number of DCs in the tier. At 4, inventory is doubled over that held in a single DC. At 9, it triples.
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