Risk Pooling

Matthew J. Sobel

Chapter 9 in Building Intuition, 2008, pp 155-174 from Springer

Abstract: This chapter shows that the following simple idea can be applied in many ways to manage business risks in the face of uncertainties. The standard deviation of a sum of interdependent random demands can be lower than the sum of the standard deviations of the component demands.

Keywords: Lead Time; Safety Stock; Dual Source; Supply Disruption; Inventory Centralization (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1007/978-0-387-73699-0_9

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