describe how third parties increase surplus chain surplus through capacity and inventory aggregation
Supply chain surplus By aggregating capacity, inventory, inbound or outbound transportation, warehousing, procurement, information, receivables to higher level, outsourcing to a third party can provide a sustainable growth of the surplus to the firm. Sometimes, a growth in surplus may also occur due to lower cost, higher quality, specialization or learning of the third party. A firm gains most from outsourcing to a third party if needs are small, uncertainty is high and other firms are also sourcing from the same third party.[10]