When multiple warehouses are combined into one centralized warehouse, the requirement for safety stock is reduced because:

Question

Quizplus · Accepted Answer

Combining multiple warehouses into one centralized warehouse can smooth out demand and reduce the total variability of demand, thus reducing the need for safety stock. While options A, C, and D may have some impact on safety stock, they are not necessarily direct consequences of centralizing multiple warehouses.

When Multiple Warehouses Are Combined into One Centralized Warehouse, the Requirement