All the Following Are Approaches Used in Risk Pooling Within

question 16

Multiple Choice

All the following are approaches used in risk pooling within a supply chain except

• A)reducing the number and variety of parts.
• B)creating flexible capacity.
• C)encouraging large orders.
• D)combining inventories from multiple locations into one location.

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Definitions:

Marginal Firm

A business that operates at the minimum level of profitability where any decrease in market prices would cause it to exit the market.

Accounting Profits

Accounting profits represent the financial gains of a business as calculated by revenue minus explicit costs, according to standard accounting practices.

Profit-Maximizing

A method or strategy that firms use to achieve the highest possible profit from their operations.

Economic Profit

The variance between a company's overall income and its opportunity expenses, covering both direct and indirect costs.