Reducing the number of warehouses should, according to the square root rule, have what effect on the total inventory in the system?
A) Decrease
B) Increase
C) Neither decrease nor increase
D) Cannot be determined from the information given

Question

Quizplus · Accepted Answer

According to the square root rule, reducing the number of warehouses should result in a decrease in the total inventory in the system. This is because as the number of warehouses decreases, the safety stock required also decreases, leading to a decrease in total inventory levels.

Reducing the Number of Warehouses Should, According to the Square