Which is NOT an advantage of using a distribution center?

The statement that retailers can carry more merchandise in each store is not an advantage of using a distribution center. In fact, one of the core functions of a distribution center is to centralize inventory management. By utilizing a distribution center, retailers can stock a larger variety of products in one location, enabling them to replenish individual stores with just-in-time inventory, rather than holding extensive stock at each site. This approach often leads to a more efficient inventory system where the total stock across locations is optimized rather than increased on-site inventory.

In contrast, the other options provided highlight the benefits of distribution centers effectively. More accurate sales forecasts can stem from centralized data analysis, which aids in better inventory decisions. Reduced risk of stock shortages occurs as distribution centers allow for timely restocking and efficient inventory management across multiple retail outlets. Additionally, using a distribution center can result in lower costs of carrying inventory by optimizing storage space and reducing excess product storage in individual stores.