Temporal Aggregation

Temporal aggregation is the process of combining

orders across time. Temporal aggregation reduces transportation cost because it results in larger shipments and reduces variation in shipment sizes. e.g.GE Power, GE Aviation. However, temporal aggregation reduces customer responsiveness due to shipping delays

Inventory Aggregation
Inventory aggregation, also called Risk Pooling, is one of the most efficient ways to reduce the level of safety stocks thereby reducing inventory across the supply chain. Inventory aggregation means combining inventories in fewer locations (warehouses). e.g. Amazon.com, Flipkart.com, Ebay.com As a result of inventory aggregation: Inventory costs decrease Inbound transportation cost decreases Outbound transportation cost increases therefore number of locations, quantity and distance to customer is critical