Risk pooling

Risk pooling is an important concept in supply chain management.^[2] Risk pooling suggests that demand variability is reduced if one aggregates demand across locations because, as we aggregate demand across different locations, it becomes more likely that high demand from one customer will be offset by low demand from another. This reduction in variability allows a decrease in safety stock and therefore reduces average inventory.

For example: in the centralized distribution system, the warehouse serves all customers, which leads to a reduction in variability measured by either the standard deviation or the coefficient of variation.

The three critical points to risk pooling are:

1. Centralized inventory saves safety stock and average inventory in the system
2. The higher the coefficient of variation, the greater the benefit obtained from centralized systems; that is, the greater the benefit from risk pooling.
3. The benefits from risk pooling depend directly on the relative market behavior. This is explained as follows: If we compare two markets and when demand from both markets are more or less than the average demand, we say that the demands from the market are positively correlated. Thus the benefits derived from risk pooling decreases as the correlation between demands from the two markets becomes more positive

ag·gre·gate〔〕〔L 「떼짓게 하다」의 뜻에서〕 vi. 집합하다;모이다
━ vt.
1 모으다, 결집시키다
2 《드물게》 총계 …이 되다(amount to)
   《aggregate+보》 The money collected aggregated $2,000. 수금된 돈은 합계 2,000달러가 되었다.
━ [] a.
1 집합적인(collective)
2 총계의(total)
   aggregate tonnage 총톤수 《선복(船腹)의》
   aggregate demand 【경제】 (일정 기간의 상품 및 서비스의) 총수요
3【식물】 <꽃·과실이> 집합의
━ [] n.
1 집합(체)
2 [sing.] (콘크리트용) 골재
3 [the aggregate] 《문어》 총계, 총수, 총액
in (the) aggregate 전체로서;총계로
aggregate·ly ad. aggregate·ness n.

off·set〔│〕 v. (offset;offset·ting) vt.
1 차감 계산하다, 상쇄하다;<장점이> <단점을> 벌충하다
   《offset+목+전+명》 offset losses by gains 이익으로 손실을 상쇄하다
2【인쇄】 오프셋 인쇄로 하다
3【건축】 <벽면에> 단(段)을 짓다
━ vi.
1 갈라져 나오다, 파생하다
2【인쇄】 오프셋 인쇄로[를] 하다
━ n.
1 상쇄하는 것, 벌충, 차감 계산 《to》
   claim an offset to the damaged goods 파손 상품의 변상을 청구하다
2 갈라짐, 분파;(산의) 지맥;【식물】 단복지(短匐枝), 분지(分枝);(가족의) 분가(分家)
3 《고어》 출발, 시초
4【인쇄】 오프셋 (인쇄법)
5【건축】 (위로 갈수록 후퇴하는) 벽면의 단;【기계】 (파이프 등의) 급격한 만곡, 오프셋
6【측량】 지거(支距)