Supply Chain Management

Category - Managing Supply

In _______ firms can significantly reduce the safety inventory they require by physically aggregation inventories in one location
  1. Inventory aggregation
  2. Insurance aggregation
  3. Demand aggregation
  4. None of the above.
Explanation
Answer: A - In inventory aggregation firms can significantly reduce the safety inventory they require by physically aggregating inventories in one location. Most electronic businesses have used this technique to gain advantage over firms with facilities in many locations. For example amazon.com holds its inventory in a few warehouses, whereas booksellers like Barnes and Noble have to hold inventory in many retail stores.
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