In Terms of the Decision of Where to Locate Inventory

question 154

Essay

In terms of the decision of where to locate inventory within the supply chain, explain what inventory pooling and forward placement of inventory mean.

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Definitions:

Production Possibilities

A curve that represents the maximum combination of goods or services that can be produced in a given period with available resources.

Marginal Product

The extra output generated from increasing a particular input by one unit, while all other inputs remain unchanged.

Customers Served

The number of consumers who purchase or are provided with a product or service by a business within a specific period.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the overall returns will eventually decrease after a certain point.