A third party increases the supply chain surplus if it aggregates the sourcing for many small players and facilitates economies of scale in ordering, inbound transportation and pro... A third party increases the supply chain surplus if it aggregates the sourcing for many small players and facilitates economies of scale in ordering, inbound transportation and production. This is called?
Understand the Problem
The question describes a scenario where a third party enhances the supply chain by consolidating resources for smaller entities, leading to cost savings in various areas. It asks to identify the specific term that describes this kind of aggregation.
Answer
Relationship aggregation.
This is called relationship aggregation.
Answer for screen readers
This is called relationship aggregation.
More Information
Relationship aggregation allows a third party to consolidate the sourcing needs of various small businesses. This consolidation creates economies of scale, leading to more efficient ordering, transportation, and production processes, ultimately increasing the supply chain surplus.
Tips
A common mistake is confusing relationship aggregation with other forms of aggregation, such as capacity or IT aggregation. Relationship aggregation specifically refers to consolidating relationships and sourcing for multiple entities.
Sources
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