aggregation of variabilityaggregation of variability - - 1. The fact that the statistical fluctuation of the time required to complete a series of dependent events or processes is less than the sum total of the statistical fluctuations of each event or process. 2. In a distribution system the variation in demand is less at an aggregation point, such as a warehouse, than at the individual consumption points.
Usage: Drum-buffer-rope uses this concept to strategically locate a small number of buffers that usually result in a significant reduction in total inventory and an increase in due date performance. Critical chain project management uses this concept to strategically locate buffers that protect series of tasks which usually results in a significant reduction in project duration and an increase in due date performance. The distribution/replenishment solution reduces the amount of inventory held at consumption points and instead focuses on holding the appropriate level of inventory buffers at aggregation points which usually results in significant reduction in the total inventory in the system and an increase in fill rate.