Risk Pooling under Demand Uncertainty

Case I N warehouses, one for each demand region (deconsolidated) 

Case II One central warehouse supplying all the N demand regions (consolidated/risk pooled) 

Completely deconsolidated distribution network Here each retail region is supplied by its own dedicated warehouse. To determine the safety stock, using serr zce level (SL) criterion, we need the distribution of the 

The safety stock to be maintained in warehouse i, denoted by SS, is given by. 

the total safety stock carried in the supply chain denoted by SS (SC), is given by. 

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Single channel type systems under manufacturer control. In this class of literature the product stops at intermediate points between a manufacturer and its end customers, for instance at distribution centers or depots. These locations add value in a variety of ways, including risk pooling of demand uncertainty across multiple retail locations, lower produc-... 

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