Explain why you think this observation is either true or false. Describe how such a shift could benefit the operations of the entire channel and how manufacturers could take advantage of the shift.

1. What is the difference between the probability of a stock out and the magnitude of a stock out?

2. Data suggest that while overall average inventory levels are declining, the relative percentage being held by manufacturers is increasing. Explain why you think this observation is either true or false. Describe how such a shift could benefit the operations of the entire channel and how manufacturers could take advantage of the shift.

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