Temporal aggregation decreases a firm's responsiveness because of shipping delay but also decreases transportation costs because of economies of scale that result from larger shipments.

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Temporal aggregation involves consolidating smaller shipments into larger ones, which results in lower transportation costs due to economies of scale. However, it also causes a delay in shipping, which decreases a firm's responsiveness.

Temporal Aggregation Decreases a Firm's Responsiveness Because of Shipping Delay