Consider two products whose demands are independent of eachother. Assume that their demands are Normally distributed and theyhave identical cost structures. Assume we use the newsvendor modelcovered in the class, which gives you a framework for how one makesinventory decisions under demand uncertainty. If we combine thedemands of the two products (i.e. Pool the demands) will the totalinventory decrease or increase as compared to making decisionsseparately for the two products. Show your arguments carefully.
