Chain stores that use distribution centers can carry less merchandise in each retail outlet.

Chain stores that use distribution centers can carry less merchandise in each retail outlet.

• A. True
• B. False
• C. Not sure
• D. Not applicable

Answer: (A)

Centralized distribution centers act as a hub for replenishment to multiple stores. When goods are routed through a DC, each retail outlet doesn’t need to keep large quantities on hand; they can maintain smaller shelf stocks and rely on frequent shipments from the DC. That lowers in-store carrying costs, makes better use of limited shelf space, and enables a broader overall assortment across the chain. In short, chain stores that use distribution centers can carry less merchandise in each outlet.

Centralized distribution centers act as a hub for replenishment to multiple stores. When goods are routed through a DC, each retail outlet doesn’t need to keep large quantities on hand; they can maintain smaller shelf stocks and rely on frequent shipments from the DC. That lowers in-store carrying costs, makes better use of limited shelf space, and enables a broader overall assortment across the chain. In short, chain stores that use distribution centers can carry less merchandise in each outlet.