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he levels of distribution has warehouse facilities appropriate to their role in the chain, and are thus able to keep their costs down, as well.

The effectiveness of the system can break down if there are incorrect forecasts at any point in the chain. Retailers who order too much from their suppliers can skew the system so that it is no longer efficient. Since distributors place their orders based on their sales, unusually high sales result in unusually high orders, and this cycle repeats itself until it reaches the manufacturer. If the

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