What does "fourth--party logistics provider" mean?
C). Four logistics providers working together
D). A logistics provider that provides four key services
If you were taking this test several years ago, the correct answer would have been both A and B, because the term fourth--party logistics providers was used to describe an objective consulting firm to integrate other logistics providers, including 3PLs. Today, the correct answer is just B, because any outside company acting as a logistics integrator is functioning as a 4PL.
What's the best reason to outsource logistics?
A). Cost containment
B). Greater focus on core competency
C). Moving manufacturing to places such as China
D). Greater supply chain efficiency
E). Economies of scale
F). Entry into new markets
G). A product launch
There's no right or wrong answer to this one. Advocates of outsourced logistics will tell you that using a 3PL is a viable solution to many supply chain challenges or business opportunities and that as long as it supports the success of your business, it's a good reason. Additionally, they will remind you that outsourcing isn't an all--or--nothing proposition. Most companies that use 3PLs also have some form of logistics operation in--house, too. It's all a matter of what works for your company.