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Explores the attitude of shippers and service providers towards outsourcing of logistics functions performed within large multinational, manufacturing companies engaged in global trade and presents a model describing the factors which influence the outsourcing decisions. Indicates that five key factors influence the outsourcing decision: centrality of the logistics functions to the firm′s core competency; risk liability and control; cost/service tradeoffs in operations; information and communications systems; and market relationships. Discusses several drivers, involving product, process and network complexities, which govern these factors.
Rao et al. (1994) studied this question.