a. Your organization currently distributes 40,000 units of product to its customers from a total of eight (8) facilities located throughout the United States. The organization wants to improve its customer service and responsiveness, and has proposed adding four (4) additional distribution centers for a total of twelve (12). How much inventory will you have to hold after you make this change?
b. A new management team has taken over, and they want to reduce cost by eliminating distribution centers and consolidating inventory. They do not want to add distribution centers, and they throw out the plan described above. The new plan is to consolidate operations at two (2) facilities. How much inventory will you have to hold if you start with eight (8) and reduce to two (2)?