An advantage of using a third-party logistics service (3PL) is improved:

An advantage of using a third-party logistics service (3PL) is improved:

A. on-time delivery of shipments due to higher inventory levels.

B. cost structure due to economies of scale.

C. access to smaller markets due to localization.

D. risk visibility due to inventory consolidation.

View Answer

Answer: B

Explanation:

Context: Third-party logistics services (3PL) offer various benefits by leveraging their expertise and resources.

Options Breakdown:

A. On-time delivery of shipments due to higher inventory levels: Higher inventory levels are not typically an advantage of using 3PLs; rather, they manage inventory more efficiently.

B. Cost structure due to economies of scale: 3PLs serve multiple clients and thus can achieve lower costs per unit through economies of scale.

C. Access to smaller markets due to localization: While 3PLs can help with market access, this is not their primary advantage.

D. Risk visibility due to inventory consolidation: 3PLs can improve risk visibility, but the main advantage is cost-related.

Correct Answer Justification: The primary advantage of using a 3PL is the ability to achieve lower costs through economies of scale, as they distribute their fixed costs over a larger volume of shipments.

Reference: Logistics management textbooks

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