A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own.This is called
A)capacity aggregation.
B)inventory aggregation.
C)warehouse aggregation.
D)relationship aggregation.

Question

Quizplus · Accepted Answer

Capacity aggregation involves combining the demand of multiple firms in order to achieve economies of scale in production, which can lead to a greater supply chain surplus. Inventory aggregation involves combining the inventory of multiple firms in order to achieve economies of scale in purchasing and storage, but this does not necessarily lead to a greater supply chain surplus. Warehouse aggregation involves combining the physical storage facilities of multiple firms, which may result in cost savings, but does not necessarily increase the supply chain surplus. Relationship aggregation is not a commonly used term in supply chain management.

A Third Party Can Increase the Supply Chain Surplus by Aggregating