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Question

The "calculus" of inventory management (as presented in the textbook) relates to each of your products separately, and only at a single firm.  Discuss how inventory management is also relevant within a supply chain context.  How would you implement multi-tier inventory management?

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Solution Preview

Inventory management allows the firm to calculate the optimal size of the shipment which will reduce the carrying cost and storage cost while making the supply sufficient to meet the product demand. Each product’s demand is unique, and are stored in different places in the inventory as well. Knowing the demand can help the firm with various 

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