1. INTRODUCTION

1. INTRODUCTION
Inventory risk pooling spans multiple operations management
practices:
Inventory management
Logistics/supply chain
Facility location

1. INTRODUCTION
Successful implementation of inventory risk pooling
Reduces inventory levels
Maintaining required service levels
Increases service levels
Not increasing inventory levels.

1. INTRODUCTION
This paper
Use a spreadsheet-based supply chain simulation
Compares a decentralized supply chain
Offers no risk pooling benefits to a centralized supply chain
Offers risk pooling benefits through the addition of a distribution
center located between a manufacturing plant and customers

1. INTRODUCTION

2. THEORY AND BENEFIT WHEN THE DC
LOCATION IS NOT CONSIDERED

2. THEORY AND BENEFIT WHEN THE
DC LOCATION IS NOT CONSIDERED
Hopp's (2008) summarizes the principle
Combining sources can share a common buffer reduces the
total to achieve performance.
That buffering law is very general and fundamentally simple

2. THEORY AND BENEFIT WHEN THE
DC LOCATION IS NOT CONSIDERED

2. THEORY AND BENEFIT WHEN THE
DC LOCATION IS NOT CONSIDERED

2. THEORY AND BENEFIT WHEN THE
DC LOCATION IS NOT CONSIDERED