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What is the effect of having more warehouses in a distribution network?

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Question

What is the effect of having more warehouses in a distribution network?

Options

  • Slower service but lower cost

  • Faster service but higher cost

  • Slower service and higher cost

  • Faster service and lower cost

MCQ
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Solution

More warehouses give faster customer service because goods are stored closer to customers, but they increase the total cost of the distribution system. This is the core service-versus-cost trade-off in warehousing.

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