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Consider the pharmaceutical and the chemical industries. In the pharmaceutical industry, products have high margins and overnight delivery typically is used. On the other hand, in the chemicall industry, products have low margins and outbound transportation cost is more expensive than inbound transportation. What is the effect of these characteristics on the number of warehouses for firms in theseindustries? Where do you expect to see more warehouses: in the chemical industry or the pharmaceuticalindustry?

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