Risk pooling enables a lower total inventory level without affecting service levels based on which of the following assumptions?
Risk pooling enables a lower total inventory level without affecting service levels based on which of the following assumptions?
Risk pooling leverages the fact that aggregate demand is more predictable and less variable than the sum of individual demands. This reduces the overall uncertainty and variability, allowing for a lower total inventory level without compromising service levels.
Aggregate planning enables you to plan demand for a product family and not on individual product. Risk pooling allows you to be able to use same safety stock to cover for a group of products rather than maintaining different safety stock for individual product. Therefore aggregate planning helps you with the info necessary to do risk pooling for a group of similar products.
? Why B