Using an independent service provider for logistics would be most appropriate in which of the following situations?

Using an independent service provider for logistics would be most appropriate in which of the following situations?

A. A shoe company that wants to penetrate a foreign market

B. A business that owns plants and warehouses globally

C. A financial services company that wants to expand its services

D. A cable television company that wants to add services

View Answer

Answer: A

Explanation:

Using an independent service provider for logistics can be highly beneficial under certain circumstances.

Here’s a breakdown of when this is most appropriate:

Market Penetration: A shoe company aiming to enter a foreign market would benefit from an independent logistics provider’s local expertise, established networks, and infrastructure, reducing the complexity and cost of setting up its own logistics operations.

Global Reach: Independent providers often have a global reach and can offer efficient and reliable services that would be costly and time-consuming for a company to develop internally. Scalability and Flexibility: These providers offer scalability and flexibility in logistics operations, allowing the shoe company to adapt quickly to market demand changes without investing heavily in logistics assets.

Focus on Core Competencies: By outsourcing logistics, the shoe company can focus on its core competencies such as design, production, and marketing, rather than the intricacies of international logistics.

Other scenarios such as a business with global plants and warehouses might already have the infrastructure needed, making an independent provider less necessary. For a financial services company or a cable television company, logistics is not a core function, and thus the question of outsourcing logistics is less pertinent.

Reference: Langley, J., & Capgemini. (2019). Third-Party Logistics Study: The State of Logistics Outsourcing. Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2017). Supply Chain Management: A Logistics Perspective. Cengage Learning.