The square-root rule is based on a number of reasonable assumptions. Which of the following is not one of these assumptions?
A) Inventory transfers between stocking locations are common practice.
B) Lead times do not vary, and thus inventory centralization is not affected by inbound supply uncertainty.
C) Customer service levels, as measured by inventory availability, are constant.
D) Demand at each location is normally distributed.

Question

Quizplus · Accepted Answer

The square-root rule assumes that inventory transfers between stocking locations are not common practice, as it focuses on the benefits of centralizing inventory rather than redistributing it among locations.

The Square-Root Rule Is Based on a Number of Reasonable