CPIM Practice Exam

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Prepare for the CPIM Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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Which factor is crucial when determining the effective use of third-party logistics?

The number of products they can store at one time.
The cost savings offered to the manufacturer.
The reliability of their shipping schedules.
The technology used in their warehousing operations.

The correct answer is: The cost savings offered to the manufacturer.

The effective use of third-party logistics (3PL) primarily hinges on the reliability of their shipping schedules. This factor directly impacts the overall supply chain efficiency. Reliable shipping schedules ensure that products reach their destination on time, which is crucial for maintaining inventory levels, meeting customer demand, and minimizing disruptions in the supply chain. While cost savings and other factors like storage capacity and technology play significant roles in the overall evaluation of a 3PL provider, the reliability of shipping operations is what fundamentally allows a business to operate smoothly and respond quickly to market changes. If a third-party logistics provider cannot deliver on time, even the most cost-effective solutions or advanced technology will not compensate for the negative impact on customer satisfaction and inventory management.