Discount Department Stores is a national retail chain. The company had one large, central warehouse.
At the suggestion of the risk manager, the company decided to build four smaller regional warehouses so that a loss at the central warehouse would not be a catastrophic blow to the company's distribution system. Splitting the inventory between four regional warehouses illustrates which risk management technique?
A) duplication
B) risk transfer
C) separation
D) risk avoidance
Question 2
Which of the following statements concerning the selection of risk management techniques and insurance market conditions is (are) true?
I. It's easier to purchase affordable insurance during a soft market than during a hard market.
II. Retention is used more during a soft market than during a hard market.
A) I only
B) II only
C) both I and II
D) neither I nor II