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Unformatted text preview: Transportation is done by truck, capacity is 150 units/trip, $700 per trip, transit time is 3 days. The store is responsible for the in-transit inventory. Find the transfer price (i.e., value at the store) which will make the decentralized system (i.e., where the store determines its best order quantity independently of the plant) behave as the centralized system (where order quantity is found which minimizes all costs. Comment on the solution and compare to transfer payment....
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- Spring '08