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Question 10

Risk pooling enables a lower total inventory level without affecting service levels based on which of the following assumptions?

    Correct Answer: B

    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.

Discussion
AyencoOption: B

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.

ZzzoeOption: B

? Why B