1. With a cycle inventory of 1500 units for each outlet.
Decentralized Policy
Problem 6.10
Each outlet demand
R = 4000(50) = 200,000
S= 900
C = 200
H = .2(200) = 40
=3000
With a cycle inventory of 1500 units for each outlet.
The total cycle inventory across all four outlets equals 6000 units.
With centralization of purchasing the fixed order cost is S = $1800.
=8485
and a cycle inventory of units.

2. Total Cost Saving Policy
Inventory system cost for any Q is
Inventory system cost for optimal Q is
The total cost for all CC outlets for decentralized policy is
For centralized system
RD = 4R
and SD = 2S