Study on 4PL as coordinating and constructing agent for supply chain system — A transaction cost theory approach

This paper introduces a new mathematical model for analyzing the economic benefits of incorporating 4PL, which is a contractor (i.e. agent) for the supply chain coordination and construction based on the division of community and the outsourcing development. The mathematical model enriches the connotation of 4PL and it broadens the thought for 4PL development. Secondly, the proposed mathematical model predicated on transaction costs, is supported by Transaction Cost Theory (TCT) and acts as the theoretical analysis tool of 4PL for coordinating 3-party generic supply chain. Through the model, some trendy conclusions can be drawn to provide theoretical support for 4PLpsilas practices.