If demand from several locations can be pooled, the overall variance of demand is __________ so that safety stock required to provide the same level of customer service is _________.

Question

Quizplus · Accepted Answer

Pooling demand from several locations typically reduces the overall variance of demand, which in turn allows for a reduction in the safety stock required to maintain the same level of customer service. This is because the fluctuations in demand across different locations tend to offset each other, leading to a more stable overall demand.

If Demand from Several Locations Can Be Pooled, the Overall