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

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.

References:

Logistics management textbooks

Research articles on the benefits of third-party logistics providers