When evaluating transportation costs, which factor is considered in centralized inventory?

Centralized inventory management involves consolidating inventory in a single location or a few locations to optimize various aspects of supply chain operations. One of the key considerations when evaluating transportation costs in a centralized inventory system is the frequency of shipments.

In a centralized inventory model, companies typically make fewer, larger shipments rather than numerous smaller shipments from multiple locations. This approach can lead to more efficient use of transportation resources since bulk shipping often reduces per-unit transportation costs. Therefore, the concept of "more shipments made over time" aligns directly with the results of having centralized inventory, as it highlights the nature of the shipment patterns that emerge from this inventory strategy.

The focus on making fewer, more strategic shipments also reflects significant operational advantages, such as reduced handling costs and improved forecasting abilities, which further enhance the efficiency of the overall transportation system. Hence, considering the frequency of shipments is critical in evaluating transportation costs related to centralized inventory.